Errors And Omissions (E&O)
As a working professional, you may have already heard of Errors and Omissions (E&O) insurance. You may have also been suggested to get one of your own by a colleague or a peer. But what is it, and why should you make it part of your professional life?
Generally speaking, Errors and Omissions (E&O) insurance is a type of liability insurance intended to protect companies from claims made by clients against a professional on their staff. Businesses commonly use this insurance to protect themselves from lawsuits alleging that they or a staff member have made mistakes or errors during the client’s interaction with the company.
You’ll be happy to know that BizInsure offers Errors and Omissions insurance policies designed for professionals like you. If you don’t have an E&O policy yet, read on to know why this is something you should consider seriously and immediately.
What does Errors and Omissions (E&O) cover?
Before we get started on what Errors and Omissions (E&O) insurance typically covers, let’s discuss for whom the insurance is intended first.
Also known as professional liability insurance, E&O insurance protects businesses from claims of errors made when providing professional services or advice. If your occupation involves advising clients or providing services, such as a marketing consultant or product designer, this insurance is valuable for you.
Other professions using an E&O insurance policy are IT professionals, security consultants, real estate agents, fashion designers, graphic artists, and accountants.
Because these professions involve working with a client directly or through correspondence, an E&O policy safeguards against claims that you either committed a mistake (errors) or missed a critical detail (omissions) while transacting with the client.
To be clear, there is more nuance to the coverage than is mentioned above; this article aims to provide general information only and should not be misconstrued as legal or professional advice.
That being said, E&O insurance policies typically cover the legal or settlement costs of claims due to professional negligence, misrepresentation or inaccuracy of advice given, bad faith conduct or unfair dealings, or errors or omissions that are otherwise contractually part of the offered service. To wit, some countries require agencies or individual professionals to have Errors and Omissions (E&O) insurance to be allowed to operate.
If you have any questions about whether or not your state or city requires E&O insurance policies for due compliance as a professional, get in touch with us and ask. BizInsure’s support team will be more than happy to help.
What are some of the most common Errors and Omissions (E&O) claims?
Let’s say you’re curious about Errors and Omissions examples – thankfully, we have a few to illustrate how this insurance policy can significantly help you.
Consultant’s strategies backfire. Consultants are tasked with advising their clients in their best interests. In the event that the advice provided has negative consequences, the consultant may be liable for damages. An Errors and Omissions (E&O) insurance policy may help cover the fees for any resulting legal proceedings.
Renovations aren’t completed on time. Contractual obligations are crucial for any business, especially for project deadlines. For renovations of an office or commercial property, for example, delays in the project could lead to loss of income on the client’s part, and they may sue for damages to their livelihood. An Error and Omission insurance policy may help recuperate the costs of finishing the project or compensate the client.
Loss of revenue resulting from financial advice. Finances are a complex part of adult life, so many individuals and businesses outsource private or professional funds to financial consultants. However, a client may demand compensation for losses, especially if these funds were mismanaged by a trusted consultant. An Errors and Omissions (E&O) insurance may help with settling with the client.
Is getting an Errors and Omissions (E&O) insurance worth it?
There’s a maxim we’re all familiar with: expect the unexpected. Common as it is, there’s no discounting the value of preparing for the worst-case scenario, and an Errors and Omissions (E&O) policy gives you an extra shield to defend yourself with should the worst come to pass.
You may be wondering about the cost. Typically, an Errors and Omissions (E&O) insurance policy is paid either by the professionals themselves if they’re working independently or by the company or agency on their employees’ behalf. The cost of a policy varies, though many providers like BizInsure offer scalable options depending on your business’s requirements and existing or potential risk exposures.
Errors and Omissions (E&O) insurance is likely more expensive or has restrictive terms for businesses or persons with high-risk exposures. Specifically, the cost of a policy may depend on the type of business or profession, base of operations or licencing, and if there are any previous claims made against the business or individual.
That being said, if you’ve invested years and buckets of sweat into your profession, an errors and omissions clause or policy that safeguards you against potential mishaps only enriches your career. You’ve gotten this far – don’t let all of your hard work end up hurting you by not having critical support you may fall back on.
Ask us for a policy quote today.