Many professionals are in a position where they face exposures, commonly referred to as “omissions” or “errors” simply by providing the type of services they do to their many clients and customers. Errors and omissions (E&O) insurance is for a wide range of businesspeople, from doctors and lawyers, to accountants, architects, engineers, and many others. If you are in the business of providing a service to clients for a fee, you may, somewhere along the line, encounter an E&O exposure or two.
Many insurance agents have clients who may be targeted for an E&O claim and those agents may have a difficult time convincing their clients that they actually should be concerned. This is where agents should provide an errors and omissions quote or several, and use their knowledge and expertise to help their clients understand the risks and ensuing consequences should they continue doing business without this important coverage in place.
Frequently asked questions about errors and omissions liability
There are novices unsure just how an E&O policy works, and they may also be pondering exactly who needs E&O, why they would need it, when they should buy it, and where to find the right policy to fit their needs.
The answer is simple; E&O insurance covers your company, or you individually, in the event that a client holds you responsible for a service you provided, or failed to provide, because it did not result in the expected, or promised, results. For doctors, dentists, chiropractors, etc., it is often referred to as malpractice insurance.
For accountants, lawyers, and other professionals, it may be called professional liability. In any case, it covers you for errors (or omissions) that you may have made, if the service is not done correctly or on time, and it costs your client money or harms their reputation.
Most E&O policies are designed to cover judgments, settlements and defense costs. Even when the allegations are found to be groundless, the cost to defend the lawsuit can be quite costly. This could possibly bankrupt a smaller company or individual, and for larger companies, it can have a lasting effect on the bottom line.
In addition to the professions listed above, others with similar concerns include individuals ranging from advertising agencies to commercial printers, Web hosting companies and even wedding planners. If you feel you have an E&O exposure, contact your agent for an errors and omissions quote, and get the type of protection you need and deserve.