A missed deadline. A miscommunication. Mistakes happen in the business world all the time. But when you or your employees make a mistake that costs a customer or client money or damages their reputation (or both!) you could be on the hook for a lot money. That’s why E&O coverage, short for errors and omissions, is one of the most important types of coverages for businesses today. This type of insurance is designed to protect companies and individuals from claims that the service they provided failed to meet expectations or promises. In other words, it’s coverage for any errors or omissions that your customer believes you’ve made.
In some instances, E&O coverage is referred to as professional liability insurance. Medical professionals call this type of coverage malpractice insurance. Most E&O policies cover the legal costs of defending yourself against claims by clients or customers, whether or not the claims are legitimate. Why is this so important? Sometimes it is your company’s fault. But sometimes it isn’t. Even if you’re found not to be at fault, the cost of defending yourself or your company could put you out of business.
Most attorneys, doctors, lawyers and financial advisers realize the value of E&O coverage. But a variety of other types of professionals, such as electricians, plumbers and contractors, often don’t realize that they are dangerously uninsured when it comes to this issue. A business consultant, for example, could provide advice that a client argues lost them millions. A bride and groom could claim that a wedding planner’s mistake on their wedding invitations ruined their big day.
Should you have E&O coverage? We can help you analyze your risk, your current coverage, and help you determine whether this important type of coverage is right for you.