What is Errors and Omissions Insurance?
If you own a company, you need business insurance. This helps address any losses associated with property damage or on-premise bodily injuries that are related to your company. But business insurance may not be the only type of insurance that you need. For example, if you own a printing company and make an error in a document that is sent to clients that causes financial loss, or if you are a doctor and misread an ultrasound leading to death or disability, Errors and Omissions insurance (E & O, also known as Professional Liability or Malpractice Insurance) can address it.
Errors and Omissions insurance is a special type of insurance that offers additional protection for losses that are not usually covered by your business insurance. These losses can be comprised of any negligent errors, omissions, or wrongful acts that involve your business and result in a financial loss for a third party.
Who Should Purchase Errors and Omissions Insurance?
What would happen if a client perceives that your business failed to complete a service on time or performed that service improperly? A client may sue, which could result in damages and costly legal expenses for your company.
Therefore, any business who offers a professional service to clients for a fee should have Errors and Omissions insurance. This can include doctors, lawyers, accountants, architects, engineers, printers, graphic artists and more. If you are a smaller company and do not have Errors and Omissions insurance, you run the risk of financial ruin should you be faced with a potential improper service issue from a client. If you’re not sure whether you should have Errors and Omissions insurance, contact the experts at Henninger Insurance.
Customizing Your Policy
As with most insurance policies, there is no one-size-fits-all solution. Your policy should be customized to meet both the needs of your industry and more importantly your specific business needs based on the risks of the work involved.
Even if a claim is found to be unwarranted, you will still need to pay for your legal expenses during the case, which can use up any reserve cash you have. Make sure that your policy provides coverage for legal fees, judgments, and settlements.
A Final Thought
Even with the best risk management policies in place and periodic training, mistakes can still happen.. Having Errors and Omissions insurance can help mitigate the losses caused by those mistakes, giving you both protection and peace of mind.
Give us a call to discuss E & O Insurance for your business.