Whether your business is small or large, one lawsuit can lead to huge losses or even force you to close your doors. To ensure that you, your company and your employees are protected against litigation, you need to carry the correct insurance policies for your industry. If your business provides services or advice to clients, E&O insurance will provide coverage for the work that you do.
A type of professional liability insurance, E&O insurance protects against claims of professional negligence or inadequacy against you, your employees or your company. Examples include:
- Tardy or delinquent work
- Breach of contract
- Faulty work or inaccurate advice
If faced with one of these or other suits, the policy will cover defense fees, court costs and judgments or settlements, independent of the accuracy of the claim.
Who Needs E&O Insurance?
There are several industries that are mandated by federal and state laws to carry E&O insurance, including attorneys, contractors, financial advisors and medical professionals. It may also be required for membership in certain professional organizations and you may be ineligible to work for certain clients if you do not have it. Moreover, as mistakes and errors are easily made in any industry, investing in policy makes good business sense as clients will be more likely to perceive you as responsible and trustworthy.
You and your employees work hard every day to make your business a success. Perceived or actual oversights in your work can lead to lawsuits that cost both time and money. Having an E&O policy will not only protect you against this risk but also provide you with valuable peace of mind.