Small Business Liability Insurance

Error Omission Insurance

The Ultimate Shield: Errors And Omissions Insurance

Money hungry lawyers and opportunistic plaintiffs are increasingly filing lawsuits against service providers, spurring a huge uptick in errors and omissions insurance sales. Errors and omissions insurance is one of the most overlooked policies on the market. Professionals that are equipped with E&O insurance know that one mistake doesn’t have to be costly.

What does E&O Insurance Cover?

Essentially, E&O insurance will cover you or your company in the event that a client alleges that you or your product did not perform your work as promised. Clients will hold you responsible for a variety of mistakes, even if these allegations are specious. It is simply a fact in today’s litigious society.

In the medical field, E&O insurance is more commonly known as medical malpractice insurance, while in the legal field, it’s called professional liability insurance. Regardless of its fancy names, this form of insurance works to protect you if you’re the subject of a claim pertaining to an error or omission in your work.

Legal costs are high, but E&O insurance will cover your settlements, attorneys’ fees, court fees, and judgments up to the limit of insurance subject to the provisions of the policy. Did you know that you might have to spend thousands of dollars just defending a specious claim? It’s true, even bogus lawsuits cost a lot of money. Remember to purchase separate employment practices liability insurance, or EPLI insurance.

The Effects of E&O Litigation

Large lawsuits can actually totally bust your company’s bankroll. Many companies have been forced to shut their doors after being sued by a former client for an inadvertent error in there work. None of these companies were equipped with good E&O insurance.

People who perform any kind of service should purchase E&O insurance. Doctors, wedding planners, web developers, and massage therapists are just a few examples of service providers who definitely need to purchase E&O insurance.  No matter what industry you are in, you should always protect your neck.

You have to remember that everyone makes mistakes, and that no matter what, you will be exposed to E&O claims. If an auto parts manufacturer receives defective equipment and installs that in an automobile unknowingly, who do you think will cover the loss?

Remember that clients might not just suffer immediate financial loss. Their reputations can also be tarnished from errors or omissions. So, they will do whatever they can to drain funds from you by seeking damages.

Companies that don’t purchase E&O insurance are sitting ducks. Litigation will obliterate their finances, and it won’t be pretty.

Be Proactive with your E&O Policy

Always purchase E&O insurance before you start providing services to your clients, especially if your field of work is susceptible to lawsuits. Clients respect companies that have insurance, because they feel confident that they will be compensated if something goes wrong.

Make sure you build an E&O policy that will protect your specific business. The majority of E&O policies are written as ‘claims made’ or ‘claims made and reported.’   The insurance company will only cover claims made and reported during the policy period. So, be sure you purchase a policy that comprehensively covers your business for the duration that you provide services.

Consult with an insurance professional to tailor your E&O coverage to your company’s needs. You’ll find that this way, you can reduce expenses while providing maximum coverage for your company.

Learn more about errors and omissions insurance and the various ways you can build a policy that will secure your business.

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