Does my business need Errors & Omissions Coverage?
To put it simply, everyone makes mistakes. Even with the highest qualified employees and the most competent risk management practices in place, mistakes will be made. Errors and Omissions (E&O) is the insurance that covers your company or you individually, if a client holds you responsible for a service you provided that did not have the expected or promised results.
Professional error is a risk in any business environment; some examples include:
- Shipping a time sensitive customer order to the wrong location
- Destroying a customer’s prized garden in the course of mowing the lawn
- Selling a bug-ridden piece of software that causes a customer’s computer system to break down
- Hiring a subcontractor who causes damage to a customer’s main water pipe while performing a routine plumbing job
There is an infinite amount of possible professional errors; some will most certainly cause a customer to sue you.
Lawsuits are not just about negligence; they are about allegations of negligence. We live in an increasingly litigious society. Defending the reputation of your business can result in lost productivity and legal costs exceeding hundreds of thousands of dollars. E&O covers judgments, settlements and defense costs even if allegations against you are baseless.
In short, no one expects to make an error or omission that harms a client, but you can’t be everywhere, all the time; mistakes will happen. Even if you are not at fault, a disgruntled client could bring a lawsuit against you. Many honest, hard-working business owners have been ruined by lawsuits although unjustified.
Commercial General Liability does NOT provide coverage for errors, omissions, contract performance disputes or any other Professional Liability issues. All E&O Policies are unique, the most familiar is Medical Malpractice for Doctors, but what fits for one profession is different for others, so give Most Insurance a call and let our professional staff help you decide which E&O Policy is right for you.