Protect Your Business: Carry Errors And Omissions Insurance

Errors and Omissions (E&O) insurance is a type of liability insurance that covers claims against your business for mistakes, negligence, or inadequate work. It is designed to protect employees and employers against clients' claims of negligence or inadequate work. E&O insurance is important because it helps businesses cover legal fees and other related expenses that can quickly add up and cause financial hardship. Without it, businesses may be at risk of closing due to the high cost of liability claims.

Errors and Omissions (E&O) insurance covers legal fees and settlements

Errors and Omissions (E&O) insurance is a type of liability insurance that covers legal fees and settlements in the event of a claim against your business. It is designed to protect your business from claims of negligence, malpractice, errors, or failure to provide a service.

E&O insurance covers the legal fees incurred in defending your business, including attorney fees, court costs, and administrative costs. These costs can quickly add up, even if the claim against your business is without merit. For example, attorney fees can range from $3,000 to $150,000, while court costs can include expenses such as reserving a courtroom or paying for expert witnesses.

In addition to legal fees, E&O insurance also covers settlements and judgments that may result from a claim. These costs can range from a couple of thousand to millions of dollars. By having E&O insurance, you can protect your business from the financial burden of these expenses, which could otherwise put your company at risk of closing.

The cost of E&O insurance varies depending on the size and nature of your business, but it is generally worth the investment to protect your business from potential financial hardship. On average, small businesses can expect to pay around $735 per year for E&O insurance, with monthly costs ranging from $50 to $100 or more, depending on the industry and specific business needs.

E&O insurance is a type of specialised liability protection

E&O insurance covers attorney fees, court costs, administrative costs, settlements, and judgments. Even if claims are found to be unwarranted, legal fees and other related expenses can quickly eat up a company’s cash reserves, causing a financial hardship. Most errors and omissions insurance policies cover judgments, attorney fees, court costs, and settlements up to the limits of the policy.

E&O insurance is typically customised to meet the specific needs of a business or industry. For example, a printer has different risks than an electrician. Both have the need for liability insurance, yet each needs a completely different type of coverage.

E&O insurance is important because if a client sues your business for errors or mistakes you made, or faulty advice you gave, your general liability policy won’t cover the claim. Errors and omissions claims can be very expensive, especially for a small company. If you don’t have E&O insurance, you’ll have to pay for any damages, settlements, and legal fees out of pocket. One large claim could put your company out of business.

E&O insurance is for businesses that provide a service for a fee

Errors and Omissions (E&O) insurance is a type of liability insurance that covers claims against your business for mistakes or services you failed to provide. It is designed to protect employees and employers against clients' claims of negligence or inadequate work.

Any business that offers a professional service or advice likely needs E&O insurance. This includes businesses that provide a service for a fee, such as:

• Real estate agents
• Accountants
• Architects
• Financial advisors
• Wedding planners
• Fitness instructors
• Physical therapists
• Engineers and engineering firms
• Consulting companies
• Barbershops and hair salons
• Printing and publishing companies
• Pet services, such as veterinarians and pet groomers

E&O insurance policies usually cover legal costs associated with the claim and most or all of the ensuing settlement. However, a policy may not cover the entire settlement if it exceeds the limit specified in the insurance contract.

Even if claims are found to be unwarranted, legal fees and other related expenses can quickly add up. Most E&O insurance policies cover judgments, attorney fees, court costs, and settlements up to the limits of the policy.

Therefore, if your business provides a service to clients for a fee, it is important to consider purchasing E&O insurance to protect yourself from potential financial risks associated with claims of negligence or inadequate work.

E&O insurance is for businesses that provide professional advice

Errors and Omissions (E&O) insurance is a type of liability insurance that covers claims against your business for mistakes made or services not provided. It is also known as professional liability insurance. E&O insurance is for businesses that provide professional services or advice for a fee. This includes:

• Accountants
• Architects
• Real estate agents
• Consultants
• Financial advisors
• Wedding planners
• Fitness instructors
• Physical therapists
• Doctors
• Lawyers
• Insurance agents

E&O insurance covers the legal fees and damages or settlements arising from claims. It is important for businesses that provide professional services because general liability insurance will not cover claims of negligence or faulty advice. Without E&O insurance, a business could be forced to close due to the high cost of liability claims.

E&O insurance policies are customized to meet the specific needs of a business or industry. The cost of E&O insurance varies depending on the size and nature of the business, but the average premium for a small business is around $735 per year. Some professionals are required by law or regulatory boards to have E&O insurance. For example, in more than 10 states, real estate agents must show proof of E&O coverage before receiving their licenses.

E&O insurance is not the same as general liability coverage

Errors and Omissions (E&O) insurance is a type of liability insurance that covers claims against your business for mistakes made or services not provided. It is not the same as general liability coverage.

E&O insurance, also known as professional liability coverage, protects your business from claims by clients for errors, mistakes, faulty advice, or failure to provide the level of service expected. It also covers claims based on failure to do the work, meet a deadline, or otherwise fulfil the terms of a contract. For example, if a client sues your IT consulting company for providing inadequate advice on using new software, an E&O policy might pay for damages or settlements arising from those claims.

General liability insurance, on the other hand, covers a range of liability protections that most businesses need to thrive, regardless of their size. It covers lawsuits over non-employee bodily injuries on commercial property, damage to someone else's property while carrying out your work, and advertising injuries (slander, libel, copyright infringement, etc.). For instance, if a customer slips and falls in your office, general liability insurance will cover the expenses.

Both types of insurance are important for different reasons. E&O insurance is required for certain industries and demonstrates to potential clients that you can compensate them if a mistake is made. General liability insurance, meanwhile, is often the first type of business insurance that small business owners need, especially for workplaces open to clients or the public. It covers risks associated with visitors and can help pay immediate medical expenses, potentially avoiding a lawsuit.

In summary, E&O insurance and general liability coverage serve distinct purposes. E&O insurance protects your business from claims related to professional services provided, while general liability insurance covers a broader range of liabilities, including bodily injury, property damage, and advertising injuries.

Frequently asked questions