The best-laid plans often go awry, especially when working with new technology, but those mistakes shouldn’t cause unwanted stress. The right errors and omission policy will help protect you from certain consequences when unexpected mistakes occur on the job.
Specifically, this policy type provides business owners with a way to cover legal costs associated with a lawsuit brought upon the business by a client after you make a professional error. It can also cover judgements brought against the business. Most general liability policies will not cover work performed on the job, whether that work causes damage or is in dispute because it is viewed as poorly performed.
The right errors and omission policy, sometimes called professional liability insurance, can also help pay legal costs when a client files a suit because of missed deadlines, employee mistakes, incomplete work and other negligence.
Two Questions to Ask Your Insurer
When searching for the right E&O policy, consider asking a potential insurer these two questions. “Will the insurer provide a lawyer?” and “Will my policy cover me and my business if I choose to sue someone else?”
Some insurers will cover legal costs and provide a lawyer to the policyholder. Some may compensate you for the cost. An E&O policy does not cover expenses if you chose to sue, however.