Did you ever notice that if you add an "s" to the end of "deadlines," it becomes "deadliness"? Similarly, if you take even a day or two longer to complete a client project, you could face a devastating (though probably not deadly) Errors & Omissions lawsuit that could cost your business thousands of dollars, demand hours of your time, and generally sap your business's productivity.
Even if you have an E and O Insurance policy in place (and, as an IT or technology professional, E&O Insurance is more important for you than it is for those in other fields), the time and energy required to defend yourself against a claim can cause your work to suffer.
The good news? You can significantly reduce your chances of facing an Errors and Omissions claim with help from two very low-tech tools: a calendar and an email.
An Errors and Omissions Claim in the Making
Picture this: it's the early days of a new project. Your bid to rebuild the client's website was chosen, and now you're in initial meetings about scope, deliverables, and timelines. Everyone's in a good mood, the sun's always shining, and you're confident that you can complete the client's specifications within three months. You leave a little time cushion for good measure and sign the contract.
But after week two, the client has changed their specs twice already. And you've uncovered on the existing site structural issues you didn't notice at first. You still think you might finish on time, but you'll have to really push it.
Unfortunately, things keep going wrong - and the client's specs keep changing. Those sunny days are but a distant memory and you now dread working on the project. There's no way you'll finish by the initial deadline, and you've mentioned this to the client over the phone. They aren't happy about it, but they acknowledge you'll need more time to adjust to the new developments.
Still, when you complete the project six weeks after the initial deadline, you're proud of your work. You did the best you could given the circumstances, and you're confident your client will be happy.
Except they're not. They wanted more bells and whistles on the website - bells and whistles, you point out, they never mentioned to you.
They decide to sue you. You think this is preposterous, but your lawyer looks over the case and mentions that they could have a case on the grounds that you delivered the project well after the agreed-upon deadline - a classic Errors & Omissions claim. (Not sure what triggers an E and O claim? Check out "6 Common Myths about Errors & Omissions Insurance.")
Your lawyer's right: because you never got written confirmation from your client about the new deadline, you have no record of the change. You realize that you could be liable for tens of thousands of dollars in expenses: lawyer's bills, a potential settlement with the client, and even non-payment for the project. Not exactly how you planned to close out the year.
The E&O-Liability-Reduction Two-Step
So how can you prevent a potential wallop to your finances with a calendar and an email (as promised at the beginning of this piece)? It's easy:
- Maintain a detailed calendar of all your projects. Break big jobs into smaller deliverables so you can keep yourself on task and recognize in advance if you're not on track to meet the deadlines you first set.
- Communicate with your clients about your progress. Contacting a client to tell them that you're not going to be able to turn in work on time is an unpleasant prospect for most IT contractors (and most small-business owners, to be honest). But delaying this conversation only makes it less pleasant. Establish open communication lines from the beginning (maybe with regular check-in emails or calls), and you'll avoid having to break really bad news late in the game.
Keep in mind, too, that sometimes clients will be dissatisfied with your work no matter how well you do it. If that dissatisfaction leads to a lawsuit, you can protect your business and personal assets by maintaining an Errors & Omissions Insurance policy to cover legal costs for any lawsuits that arise. (For more tips on minimizing the risk of an E&O liability suit, check out the article "Can a Vocabulary Lesson Prevent E&O Lawsuits?")
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Writtten by Brenna Lemieux - check her out at Google+ or Twitter