Posted on March 17, 2022
What Is Errors And Omissions Insurance?
Professionals are responsible for their actions every time they perform work for a client. This means that even a simple mistake, misunderstanding, or disagreement with a customer can potentially lead to an accusation of negligence and an expensive lawsuit.
In the event of a claim, the professional will have to bear the cost of defending the claim. This invariably means, at a minimum, incurring attorney fees and, at worst, paying damages and also the plaintiff's legal costs.
Errors and Omissions insurance is designed to protect professionals against these risks. You can also go online and request a quote before buying erros and errors and omissions insurance.
Errors and omissions insurance was previously only required in traditional professions such as architecture, engineering, law and medicine, but today it has become a vital form of protection for consultants in any field such as information technology design, marketing, business consulting, real estate and recruitment.
Also known as professional liability insurance or E&O insurance, insurance covers the financial consequences of an error, something a professional did wrong, or an omission, something the professional did not do.
Claims frequently arise from disputes stemming from confusing communication between the professional and the client, or a perception that the professional promised too much. Even if there are no obvious 'errors' or 'omissions', this may not prevent a client from claiming negligence. This means that even the most diligent professionals risk a client claim and the associated cost of defending themselves.
In the event of a claim, professionals will often have to defend against clients with bigger pockets who can easily afford the cost of litigation. An errors and omissions insurance policy from a reputable insurer helps level the playing field.