No matter your profession or industry, every business needs insurance of some kind. Whether it’s workers compensation or vehicle insurance, each business wants to have their bases covered. Errors and omissions insurance (E&O) should be a part of any business that provides a service to clients for a fee. Not investing in E&O insurance is a great financial risk for many businesses as you leave the company vulnerable to lawsuits. Errors and omissions covers you or your business in the event that a client holds you responsible for a service you provided, or failed to provide, that did not have the expected or promised results.
Do I Need Coverage?
You, or your business, need coverage if you provide business services, such as consultations, to clients for a fee. Everyone and every business make mistakes and it’s important to be covered in the event a mistake occurs. If your client experiences a loss in customers, profits, or something else they deem valuable, your company could be in harm’s way if you don’t have E&O insurance. Your liability insurance often doesn’t cover the types of losses that errors and omissions insurance will. Look into your liability policy and gage whether or not your company is at risk without the addition of E&O insurance.
When Should I Buy?
As with any form of insurance, the best time to buy is before any potential risk takes place. If your business is in the service industry, investing in an E&O policy will not only reduce the risk your business takes, but it reduces the risk for clients. Having E&O as a part of your insurance portfolio could be a selling point as clients understand they could be compensated in the event of a loss. Make sure you look to errors and omissions right away and before any potential mistakes can take place. It is better to be safe than sorry. If you’re unsure about your level of risk, consult with E&O insurance professionals to see where the risks may lie.
Where Can I Buy E&O?
Buying E&O requires time and research. You’ll need to understand exactly where you, or your company, are at risk before buying a plan. Look for an insurance provider that understands your industry, your risks and can help you develop a plan that covers potential exposures. Different information may be needed depending upon the type of exposures you, or your business, could encounter. As with any form of insurance make sure to shop around to find the best pricing and coverage available. Keep in mind that the cost of E&O insurance may vary greatly depending on the class of your business, the location, and claims experience.
Errors and omissions insurance is a necessity for a number of consulting and service professionals. Not only will you be able to handle claims from disgruntled clients better, you reduce the risk and exposures that come with running a service-based business. E&O insurance can help cover legal costs and secure the efforts of your business.