Businesses are essentially made of people, which means that mistakes can happen. Unfortunately, there are times when those mistakes cost quite a bit of money, often to the detriment of your customers. This can often result in negligence lawsuits that financially hurt your business. Even if you don’t have to pay out an extremely large settlement, there are still attorney’s fees and other costs associated with litigation.
That’s where errors and omissions insurance comes into play for your business.
What Are Errors and Omissions?
Errors and omissions encompass a wide range of mistakes or negligent/reckless actions that can cause harm to your customers. Errors and omissions lawsuits are brought against businesses when some type of action or event occurs that causes financial harm to the client. It could be a mistake from an accountant that results in financial harm, negligent actions, inaccurate advice, or many other claims made in court.
Errors and Omissions Insurance
Errors and omissions insurance can supplement traditional liability insurance plans by protecting your business in the event a lawsuit is brought against you due to the actions of your employees. Errors and Omissions Insurance specifically pertains to allegations of an error or mistake and those of omissions or negligence. This type of insurance is generally used by businesses that deal in service careers, including accounting, financial management and planning, legal, engineering, and advertising (among others).
Errors and omissions insurance can help cover the cost of settlements, legal fees, court costs, and other costs associated with dealing with a lawsuit against your business.
Do You Need Errors and Omissions Insurance?
If you work in a service-based industry, especially one where your employees handle high-value accounts that could result in losses for your customers, it’s generally a good idea to have a supplemental errors and omissions plan to add on to your general professional liability plan. This will give your business the comprehensive coverage it needs.
Keep in mind that errors and omissions insurance will not cover your business in the event of illegal actions or discrimination.
If you need errors and omissions insurance or are not sure if this type of plan is right for your business, get in touch with the commercial insurance agents at The Patrick J. Thomas Agency today. We can help you formulate a business insurance plan that protects your business and its assets.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.