E&O Insurance: What It Is and Why You Need It?
When things don’t turn out as expected, how do you protect your business?
The Importance of E&O Coverage
Mistakes happen. They can be prevented, but they happen. They happen to the experts and the amateurs, they’re a part of life. Although, in business, all kinds of measures are taken to minimize them, even the most polished processes have some sort of margin of error, which they need to manage. When things don’t go as planned, errors and omissions insurance coverage can help.
What would happen if a client accused you of incurring mistakes that cost them money? That’s what the E&O insurance coverage is for. Errors and omissions coverage are meant to protect you and your employees from those accusations, which might encompass claims that your work was unprofessional, incomplete, or just not up to par.
Those moments when things turn out different than expected, clients could feel the need to point their finger at your company for not meeting their expectations and E&O insurance, also known as professional liability or malpractice insurance, can cover you when lawsuits are filed against you over professional errors, regardless of whether they’re real or perceived.
How Can E&O Insurance Help My Business?
We all know that as soon as lawyers get involved, the costs increase, even if the matter is quickly resolved. Now, can you imagine how expensive things can get if the resolution takes months? Let’s not.
E&O insurance coverage is a great help in this type of situation, as it can help you pay for lawsuit expenses like:
- Lawyer fees
- Court and administrative costs
- Settlements and judgments
Not every business will have the same errors and omissions policy. Every business has different needs, priorities, and risks to manage, therefore, the coverage can vary. This is something to discuss with your insurance agent to make sure you properly identify the coverage that will best suit your business needs.
Every business should have E&O coverage, even a starting independent insurance agency. Whether your starting in the insurance industry or any other industry, make sure you protect your business from liabilities. Call AAI today.