Part of the sound foundation of any business’ insurance portfolio, Errors & Omissions (E&O) Insurance is a kind of professional liability insurance that protects companies and individuals against claims of inadequate work, or negligence performed on behalf a client or customer.

Errors or omissions can occur in nearly any profession, whether you’re a doctor, a lawyer, or a computer programmer. This type of insurance prevents a company or individual from absorbing the full cost of a legal defense. Even if an allegation is deemed without merit by a court, lawsuits can cost thousands of dollars, and even bankrupt a small business. E&O covers court costs and settlements up to the amount specified on the insurance contract.

You may want to consider E&O Insurance if your business:

  • Provides opinions or advisory activities
  • Offers professional consultation services
  • Is required to have E & O coverage by its customers

Each contract is unique and may have different exclusions, coverages, and limitations. This insurance does not cover illegal or fraudulent activities. In most cases, it does not protect against punitive damages. Coverage can extend to both W2 and 1099 subcontractors and can cover your employees globally.

E&O is separate from standard general liability or property insurance coverage, neither of which protects your company from allegations of mistakes or malpractice.

Protect your reputation, transfer some of the risk of unexpected legal expenditures to an insurance carrier, and reduce the financial impact on your business by contacting your Snyder broker today.

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Protect Your Business With Errors And Omissions Insurance

Chances are, you already understand that a business liability policy will cover your business’ losses against claims of bodily injury, property damage, or advertising injury. What many business owners don’t realize, however, is that business liability insurance doesn’t cover omissions and errors, like a typo on a substantial order of an important event invitation. Or in the event of a plumbing repair failure that results in the flooding of an office. That’s where Errors and Omissions Insurance comes in.

An issue like those just highlighted is covered by Errors and Omissions (E&O) Insurance. E&O is a specific defense against a loss that isn’t covered by typical liability policies. An errors and omissions policy guards your company against such things as a client’s suit claiming a neglectful act, error, or omission during the process of business activities which results in financial loss for the client. An Errors and Omissions Insurance policy can also protect you retroactively, depending on the coverage. More about that later.

Expensive errors can, and do happen, even when employees and staff are capably trained and have years of expertise. It is only human. And that is what makes an Errors and Omissions Insurance policy such vital protection for your business.

What Type of Business Should Have Errors And Omissions Insurance?

If your company provides fee-based services to customers or clients, an errors and omissions policy is an important part of your business’ insurance coverage. Snyder Insurance covers printing companies and building-trades contractors like electricians, plumbers, HVAC installers, and sheet metal workers.

An E&O insurance policy generally covers the company’s owner, employees, and subcontractors that work on behalf of the company.

E&O is tailored to meet the particular requirements of a business or industry. Ex: printing companies have different risk factors than those of electricians. Each need liability insurance, but the very different natures of those businesses require entirely different types of coverage. A good Errors and Omissions Insurance will take the special needs of your business into consideration.

What Errors And Omissions Insurance Coverage Is Best For Me?

Each policy will be different from one business to the next. E&Os are designed to address innate risks, and the typical exposures unique to various businesses.

Another thing to consider is the retroactive date on an Errors and Omissions Insurance policy. For example: an event that resulted in a loss for a customer occurred a number of years ago. But the mistake didn’t come to your attention until the court summons arrived in your inbox. In circumstances like this one, the retroactive date of your coverage is of great importance. The farther back that retroactive date, the better your coverage and protection.

Just because a claim is unwarranted, that doesn’t mean your company won’t suffer the expense of legal fees and related expenditures. These can swiftly consume a business’ cash reserves, and cause fiscal hardship. Most E&O policies protect against any judgment, lawyer fees, court costs, and settlements, per the limits of the coverage.

The business insurance experts on our team at Snyder Insurance will help you customize an Errors and Omission Insurance policy that perfectly suits your business and your budget.