Providing the advice that happen to be a wrong one or omitting of proving an advice when necessary may get you an Errors and Omissions type of lawsuit. This type of policy is suited not only for people and companies that provide professional advises, but is also very much needed for many service oriented businesses.
Some industries use different term for Errors and Omissions policy (E&O):
- Malpractice liability insurance – is what doctors, dentist and lawyers tend to use.
- Professional liability insurance – is what engineers, architects and beauty salons call it.
- E&O – is the short abbreviation for Errors and Omissions coverage.
Regardless of what you call it, this coverage is designed to protect you or your company for errors you made or omitted to perform the duties that were expected of you to receive the desired outcome, which caused a financial loss.
You may have not even done anything wrong, however, your customer may think otherwise and you may still end up with the claim that could be very costly, so, skipping E&O might become an expensive lesson for many businesses.
Many business owners assume that their General Liability, Business Owner policy or Workers Compensation insurance will defend them for practically any claim only to find out that these policies exclude E&O types of claims.
Any business that provides service is exposed to Errors and Omissions claims. Even if you are a sole owner or you have the most knowledgeable employees – you are still at risk. Let’s face it, everyone makes mistakes. No one is perfect and, once again, even if you are perfect, your customers may not always feel that way and, regardless who is right or wrong, they may still file a lawsuit against you. You may win or lose the lawsuit, but either way, it will be a costly process.
What if you are a wedding planner and planned the whole event for a wrong date, let’s say a week before it should be, and everyone showed up but the bride and the groom?
What if you sent a very important, time sensitive parcel to a wrong address and the recipient lost a multi-million sale because of absence of the content of that parcel?
What if you, an attorney, advised your client to go through a trial, that you estimated would cost only $100,000 and guaranteed that your client would win, but instead, your client ended up spending $250,000 and lost?
There are thousands of “what ifs” that happen every day. Get the proper Errors and Omissions protection today!