Errors and omissions insurance is an often overlooked insurance policy that can protect your business from lawsuits in the event of a professional error. Designed to protect you from legal disputes over professional negligence, this type of insurance can save you time and money.
When a customer or client pays for your services, they have a reasonable expectation that you will do the job right. Mistakes happen and, while this type of insurance might sound unnecessary, it can be extremely useful in many situations.
If you’re a professional or business owner, you should consider errors and omissions insurance. Here are some things you need to know about it:
What is covered by errors and omissions insurance?
Did you know that you could face a professional negligence lawsuit even if it was your employee at fault? Errors and omissions insurance can protect you from all sorts of scenarios, allowing you to focus on doing your best work.
Here are a few common claims that errors and omissions insurance protects you from:
- Professional Negligence: As a service provider, your company is liable for any errors made while performing a service. Whether the incident involves you or an employee, professional negligence claims can be expensive and harmful to your professional reputation.
- Misrepresentation: If your company provides information that is deemed faulty or misleading by a client, you could be held liable and face a lawsuit for any potential damages.
- Libel or Slander: If a client feels that you harmed their reputation through your work or something you said, you could face a libel or slander lawsuit, whether or not your actions were intentional.
- Inaccurate Advice: As little as an underhanded remark or suggestion could be turned against you and rolled into a lawsuit. Make sure you’re not on the hook for inaccurate advice.
- Loss of Documents: If your company is the victim of cyber theft, you could be held liable for the loss or damage of a client’s documents and business data. Make sure you’re protected from these types of situations.
What’s the difference between professional and general liability?
As a professional, there are a variety of insurance policies that can protect you and your assets. General liability insurance is another important type of insurance, but there are a few important differences between it and professional liability:
General liability insurance is designed to protect you in the event of bodily injury or property damage. In other words, if someone is injured on your property or at a job site, you will be covered by general liability insurance. However, it usually doesn’t cover professional services or advice.
Errors and omissions insurance protects your company from mistakes that cause the client to experience a financial loss. This could be anything from a delayed delivery, causing them to miss out on revenue, to advice that leads the client to lose potential income — and that’s just the start. Professional liability insurance offers coverage if your company is sued over errors that can be real or simply perceived, which can be very useful in certain scenarios.
Who can benefit from errors and omissions insurance?
Errors and omissions insurance can be useful in a variety of situations, regardless of your industry. You might think that professional liability insurance is only for consultants or people handling sensitive information, but it’s more common than you think. Here are a few of the many careers and industries that can benefit from errors and omissions insurance:
- IT Consultants & Contractors
- Engineering Contractors
- Marketing Consultants
- PR Firms
- Insurance Brokers
- Media Agencies
- Social Services
- Financial Professionals
- Legal Professionals
If you’re a professional who fits one of the categories above, you should consider getting errors and omissions insurance. Here at Oakville Insurance Brokers, we specialize in building professional insurance policies. We can help you find the coverage you need. Contact us today at 905-845-0391 or get a quote here.