Sometimes called E&O Insurance is errors and omissions insurance coverage. Mistakes can be made in a service business and this insurance can make these mistakes less costly. E & O covers individuals and companies against a client that holds you liable for a service you performed or failed to provide. The insurance coverage gives you or your company safety should an error or some omission on your part cause financial loss to your client.
For doctors its malpractice insurance. For architects or computer programmers it’s called professional liability insurance. Not all policies are created equal, it all depends on the nature of your profession. Each policy is written for the type of business you are in.
Lawsuits that might appear to be without any grounds, still have to be defended. A small company may not be able to survive after paying a settlement. Depending on the coverage, this is when your E & O policy comes into place.
John and Mary are planning to have fish and chicken for their wedding reception. The wedding planner gets their menu mixed up with a wedding for the next day. The guest are served steak and chicken at the reception. This kind of mistake has embarrassed the wedding planner and made the wedding couple upset. The mistake could have cost the wedding planner her business and the chance of a bad reputations, if she did not have a E & O policy in place. Instead, a claim is filed and the bridal couple get a little more money for the sofa they want. Perhaps letting all your clients know you have insurance to cover mistakes would be good for business.
Make sure that you don’t confuse general liability insurance with E & O insurance. Only an errors and omissions policy will cover you and your company from a contract dispute issue. The price of a policy will vary, your area, your business type and if you have had any claims before will all be a factor in the price. Get a policy before you need it and reduce financial risks.
Make sure that when you receive your errors and omissions insurance coverage that you look it over and make sure that it fits your type of business.
Every professional should get errors and omissions insurance coverage to protect against errors that costs their clients money. With EO insurance policies you get protection that is not offered by a general liability policy.
Tags: business insurance, entrepreneur insurance, errors and omissions insurance, home business insurance, home insurance, liability insurance, small business insurance