Does Your Collection Agency Have Errors & Omissions Insurance?

May 7, 2009

When an account is over 120 days past due, it is always wise to hire a commercial collection agency to go after the debt in the state that the debtor resides in. Your business debt collection agency may need to hold licenses in the state where the money is to be collected from in order to satisfy rules, codes, and laws.

Some collection agencies will attempt to go after money in states that licenses are not held in while applying for the proper credentials to do business in that state. If money is collected prior to licenses being issued and the debtor find out about this practice, they may sue you in court to get their money back that was taken from them illegally.

To protect yourself from hassles developing from commercial collection agency paperwork problems, it is important to hire collection agencies that have a form of errors and omissions insurance that will cover your expenses if you have problems over actions that their firm has used while working on your account.

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