Individuals and companies offering professional services to clients need errors and omissions (E&O) insurance. When a client makes a claim of negligent actions or inadequate work against the professional or their company, the insurance policy helps settle the claim. The insurer covers any court costs associated with the case and any settlement up to the amount outlined in the policy.
Errors and commissions insurance mitigates or eliminates potential liabilities when someone sues a professional or business. Without this protection, the company or individual could find they become liable for millions of dollars in damage and any legal fees associated with hiring a legal team to defend them. To learn more about this type of policy, visit Heffernan Walton Insurance Services.
Who Needs Errors and Omissions Insurance?
Any company or individual providing professional services benefits from this type of insurance. This includes consultants, insurance agents, attorneys, and financial advisors. Accounting firms, marketing agencies, and graphic designers fall into the category of businesses that benefits from errors and omissions insurance, and the same holds for doctors and engineering firms. Nonprofit organizations, contractors, and those offering general maintenance providers also should look into an E&O policy. Speak to an insurance provider to learn if this type of policy would benefit you.
What Does the Policy Cover?
Professionals often ask what types of claims the policy will protect them against. Negligence serves as one example. If a client claims there was an error or omission in the services provided by the individual or business, this policy comes into play. The same holds when a client states the company or individual misrepresented a product or service.
Inaccurate advice could lead to a claim being filed against a business. Any mistake or oversight by the provider may lead to a lawsuit, and the policy would reduce the provider’s liability up to the amount listed in the policy. Undelivered services and missed deadlines may also lead to errors and omissions claim being filed.
What the Policy Doesn’t Cover
Certain claims don’t fall under an errors and omissions policy. This includes property damage and injuries to anyone visiting the property, including suppliers, customers, and employees. The policy doesn’t cover employee discrimination claims. Furthermore, an E&O policy will not cover criminal prosecutions or claims involving misconduct carried out with malicious intent. It also won’t cover temporary employees. Professionals in need of this type of policy should speak to their insurance agent to learn what other policies are necessary to provide the desired level of protection.
The Cost of Errors and Omissions Insurance
Many factors play a role in how much a professional or business will pay for this type of coverage. This includes the location, industry, business size, and employee training. Contracts, revenue, coverage limits, and claims history also influence the price. The most accurate way to estimate the cost involves speaking to an insurance agent.
Any person or business offering professional services benefits from errors and omissions insurance. An individual may sue, even when the suit has no merit. This insurance helps the person or business being sued pay legal fees. If the plaintiff wins the case, the policy also helps cover any settlement awarded.
Professionals find the policy gives them peace of mind, as they know a mistake or error on their part or the part of someone working on their behalf could cost them their business. The insurance protects them from significant financial losses, so this does not happen.