I am a coder as well as a Biller. In considering starting my own home based business, what liability should be aware of?

I am a coder as well as a Biller. What liability should I be aware of as I start my own business?


Response:

It’s a good idea when offering a service business to protect yourself from professional liability lawsuits. Some clients will blame the billing service for errors or omissions and take legal action claiming your services caused them a financial loss.

I haven’t had to endure this type of litigation fortunately but some clients can be very vindictive and blame the former billing service for a lot of stuff. But usually it’s difficult to prove the billing service is negligent - most small offices don’t do a real good job of keeping such documentation and don’t want to be bogged down with proving such negligence - unless of course it’s just outright blatant and flagrant.

Many insurers offer what are called Errors and Omissions (E&O) liability policies. This insurance provides protection from liability as a result of negligent acts, errors, or omissions claimed by the client as a result from the services you provided.

It’s important to understand what the liability policy covers - you would certainly want coverage for legal defense costs even if you are determined to be innocent. These can really ad up.

There are firms who specialize in professional liability insurance. Or you could get a quote from your homeowners insurance company - they may offer you a break since you are already insured with them. Regardless as with anything else you may want to shop around.

A lot of E&O insurance policies are offered in increments of $1 million with deductibles that typically range in the thousands. As with a lot of insurance policies you can probably trade off a higher deductible for a lower premium.

Typical E&O policies only cover you for the time the policy is active and not for claims filed before or after the policy was in place. So if you cancel your policy coverage would end and wouldn’t cover claims submitted after the policy was in effect - even if the work in question was performed when the policy was active. It a good idea to make sure your policy has an extended reporting period to allow claims to be submitted after closing the policy.

Hope this helps answer your question.

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