Mistakes happen to everyone, even professionals. Whether you are a real estate agent and you forgot to include important details about a home to a buyer or a tax preparer who made a bad calculation… it can happen. However, if a mistake you or your business made causes a client to experience financial loss you could have a lawsuit on your hands. So how do you protect your business?
Errors and Omissions Insurance.
Errors and omissions insurance, also commonly referred to as E&O, is professional liability insurance that helps protect you from lawsuits claiming you made a mistake in your professional services.
In other words, if you are sued for a mistake, you made while providing professional services, E&O can help to cover court costs and settlement fees associated with the lawsuit. Without E&O, the costs of these lawsuits could be so expensive that they could put your business at risk of closure.
E&O can protect your business from several types of claims including:
- Errors in services given
- Violation of good faith and fair dealing
- Inaccurate advice
It is important to note that E&O won’t protect you from every type of claim. It doesn’t cover illegal acts, purposeful wrongdoing, discrimination, or harassment. Other claims such as bodily injury, property damage, and employee injuries and illness aren’t covered by E&O either as they are often covered under other policies such as your general liability insurance or worker’s compensation.
Any business that provides a service to its’ customers should carry an E&O policy. This can include accountants, engineers, marketing firms, consulting companies, hair salons, groomers, and more.
Given that E&O benefits so many unique types of businesses, the cost is unique to the individual business. Different factors such as your risk, coverage limits, claims history, and location factor into how much your E&O policy would cost. However, there are some actions you could take to help minimize claims and in turn, lower your E&O cost, these include:
- Training your employees to spot and avoid mistakes
- Checking your products and services for quality control
- Communicating regularly with customers to make sure they are happy with their service
E&O insurance can help protect your business when mistakes happen. Give us a call at 844-GANNONS to get the conversation started today!