Mistakes happen. It is a fact of life, and often a stimulus for some of the best lessons. Unfortunately, it can be a harsh reality to face for many, especially business owners, who often have both their earnings and their reputation on the line. Errors & omissions insurance (E&O) is a type of insurance coverage that is designed to protect businesses against claims resulting from their own mistakes or negligence.
What Is E&O Insurance?
Also known as ‘professional liability insurance,’ E&O coverage protects businesses in the event that someone brings legal action against them for losses sustained due to their alleged subpar performance. Whether your business is guilty of a professional error or not, E&O insurance pays for any legal defense, court costs, and judgment amounts levied you.
Areas of Coverage
As the name implies, errors and omissions insurance covers professional mistakes (errors), as well as things you may overlook (omissions). If you make an error that impacts a customer and they decide to sue, an E&O policy will pay for any legal expenses you incur. Most commonly, E&O insurance will protect against customer claims made on the basis of your business making a mistake that caused the plaintiff financial harm (an error) or if you failed to perform an expected service (an omission). This can give you peace of mind knowing that your organization is protected against a variety of E&O-related claims, and will always have money to cover any associated civil lawsuits and damages.
E&O vs. General Liability
Keep in mind that E&O insurance is not the same as general liability coverage, and vice versa. While general liability protects against third party bodily injury, property damage, and reputation harm, E&O coverage protects your against lawsuits that are filed as a result of the work you do. This means that E&O insurance does not cover damages resulting from criminal or dishonest acts, or from bodily harm or death to another person. It typically does not cover damages you cause to another person’s property, either.
Moreover, while E&O coverage will cover your defense costs, judgment costs and/or settlement costs, these expenses will only be covered up to the limits of liability on your policy. This means that E&O insurance is often restricted to claims due to negligence, errors or omissions, and only cover up a selected financial amount. For example, if a lawsuit costs you more than your limit, you would have to pay what is left.
Professional Errors & Omissions Insurance Consulting
Mistakes show that you’re human human. That much is true. And in our increasingly contentious society — one where disgruntled clients are all too ready to sue — businesses need to be protected. Of course, how do you find (let alone choose) an E&O policy that works for your business and its unique needs, budget and goals? Consider working with an errors & omissions Insurance consultant at BenefitCorp.
Our experienced consultants can help you find a solution that works to your advantage, while saving time and money in the process. We will help you get what need (and not pay extra for what you do not), while ensuring that the E&O coverage you get is both comprehensive and comprehensible. Contact us today to learn more about our expert E&O insurance consulting services, and to get started finding a policy for your business. To request a consultation, call our offices at 972.737.7875 or contact BenefitCorp through our online form.