What is the minimum amount a sole proprietor must keep readily available for e/o fidelity insurance?

The minimum amount a sole proprietor must keep readily available for errors and omissions (e/o) fidelity insurance is $2,500. This amount is established as a safeguard to ensure that the insurance can cover potential claims and losses that may arise due to mistakes or negligent actions by the business owner.

In the context of fidelity insurance, which protects against losses caused by fraudulent acts of employees or representatives, having this baseline amount ensures that there are sufficient funds to address claims, providing a level of security both for the business and its clients. This requirement reflects the importance of maintaining a responsible financial buffer to handle unexpected incidents and uphold business integrity.

Understanding the set amount is crucial for ensuring compliance with regulations pertaining to insurance requirements for sole proprietorships in the industry.