Professional liability insurance, also known as errors and omissions insurance, is a special type of insurance that protects your business against lawsuits resulting from a service you provided. Specifically, it protects your business and assets in case a customer claims that they experienced losses due to mistakes in the service you provided to them (errors) or because of what you didn’t provide to them (omissions).
Professional liability insurance is an optional coverage, but in certain areas, it’s required for those in fields such as medicine where its commonly referred to as malpractice insurance. Here are examples of other practitioners who can benefit from E&O insurance:
Technology professionals: Contractors whose jobs require that they build or repair technology should get E&O coverage. Even if its not your fault, its possible for you to be blamed for a customers gadget gone bad.
Real estate professionals: If a client follows your recommendations and ends up with financial losses, they may want to file suit to recoup their losses. E&O coverage will cover the cost of any legal fees and settlements.
Legal professionals: It’s not unusual for a client to sue their attorney following a legal case. E&O coverage will ensure that any fees and payments towards your defense are covered.
It’s clear that professional liability insurance is vitally important, especially for professionals who provide services directly to customers. Be sure to include it as part of your coverage when you sign up for your business insurance package.