Independent Sales Reps & Distributors
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Can you use an umbrella policy work if your company is an LLC?
If you represent a manufacturer -you should have a hold harmless clause in your contract -that you are held harmless in the event of any legal action against the manufacturer of the medical products
My opinions from being in the business -not legal advice -(have been in the health care admin business for 20 years)
> Umbrella coverage added to your homeowners
> insurance will do the same thing -
A personal umbrella policy does not provide insurance for professional activities. Business activities are EXCLUDED from personal coverage.
Hold Harmless agreements typically provide the rep with protection from any claim resulting from a product failure. Typically they do not hold harmless the rep from any "error or omission" (E&O) resulting from the advice the rep gives.
That said each agreement is different.We review them regularly for reps at no charge to help determine their exposures.
In all cases the device company will not hold the rep harmless for poor advice, over promotion or going off label. This is down to the rep.
When in the OR the doctor is in charge. Reps have no control over what the Doctor does. Does the Doctor carry enough insurance to provide for al lifetime of care to an injured patient? If something goes twrong the patients attorney will go after everybody who was in the room including the rep in order to collect money to pay for the necessary care.
We have seen too many instances of the rep not having the proper insurance ending up with a significantly reduced lifestyle as a result...whether the
rep has an LLC or not.
The proper E&O insurance provideslegal defense for the rep and will settle damages whether the rep is culpable or not.
Reps work hard to build their business and enjoy its rewards. Having the proper insurance in place for a few dollars a month is far more preferable than losing everything because of a legal action whether spurious or not.
Further the medical centers seek the rep to have general liability insurance and appoint the credentialers to chack for this. The prupose is to protect the medical center in the vent the rep damages any piece of the medical centers expensive equipment. In spite of its name, General Liability is limited as it does not cover damages from "your work" Whereas E&O insurance does.
To have confidence in their insurance protection a rep should carry both. This can be done at modest cost. After all if you are going to spend money on insurance it should be the right insurance that will respond when you need it to.
The only way to obtain proper protection is through dedicated icommercial insurance policy issued exclusively to the rep and his LLC. the only avenue to this is through a professional insurance broker.
My insurance company informs me that if I have a business, if a sell a product, etc. the umbrella policy will not cover.