As a business owner, you work hard to provide consistent, reputable service to your customers or clients. Despite you or your employee’s best efforts, however, a customer could feel mistreated or misguided by the advice you provided.
Companies that provide professional service, consulting or recommendations to clients are vulnerable to claims of negligence. That’s where errors and omissions insurance comes in, which covers you for errors that you’ve made or that the client perceives you’ve made. If an error or omission on your part results in a financial loss for your client, errors and omissions policies cover judgments settlements and defense costs. Without a proper errors and omissions policy in place, a negligence claim can significantly impact your company’s bottom line, even resulting in bankruptcy in some cases.
Does My Professional Services Business Need E&O Insurance?
Professional service providers that typically purchase errors and omissions policies include attorneys, consultants, accountants, and contractors, but that’s not to suggest that those are the only professions needing E&O coverage.
Errors and omissions policies cover two significant business risks:
- A client’s financial loss as a result of your product failing to perform as intended or expected
- A client’s financial loss as a result of an act, error, or omission committed in the course of your professional services
Simply stated, if you provide a service or product to a client for a fee, you have errors and omissions exposure. That means anyone providing professional advice, solutions, or products to clients — from technology firms to realtors to contractors to non-profit organizations — should strongly consider errors and omissions insurance.
How Does E&O Insurance Protect My Professional Services Business?
What happens if the service you provide isn’t implemented on time or correctly, and it costs the client money or hurts their reputation? Even if your company is ultimately found not liable, the court costs are considerable, and an E&O policy keeps you financially covered so you can continue to run your business.
Errors and omissions insurance is never one-size-fits-all, and affords a broad range of coverage options, depending on your company’s specific needs. Some protections provided by E&O insurance include:
- Claims of critical oversight
- Claims of bad judgment
- Negligence claims
It’s important to recognize that general liability insurance only protects you in the event of property damage. Without errors and omissions insurance, your business isn’t protected in the event of financial injury.
Even if you have every confidence in your products, services, or employees, there’s always a chance that a client or customer may bring a claim against you. Contact the insurance experts at ValueOne or call 855 200-0850, and protect your business from the unexpected with an errors and omissions policy.