Errors and Omissions - Could this Apply to You?

Everyone makes mistakes, but a professional who makes them could find himself on the receiving end of serious complaints by clients. In professional terms, some of these mistakes are known as errors and omissions and they can be very costly. Take a look at some instances when errors and omissions can cause a problem, and the potential for lawsuits.

If you are a professional who offers advice of any kind in the course of your work, you are probably very conscious of what you say and to whom you give advice.

You may find yourself rushed for time while you're talking to a client and you simply don't take time to fully explain something you said. The client doesn't even realize he's misunderstood and takes action based on what he believes he heard you say. This is a potential case for an errors and omissions lawsuit. As you can see, you don't even have to give bad advice for this to happen - it could be as simple as not fully explaining the advice you do give or even that the client doesn't fully understand.

Either can be the catalyst for an errors and omissions lawsuit. So what are you supposed to do? One option is to carry errors and omissions insurance.

You may think that situations of errors and omissions would only be applicable in cases involving professionals such as doctors or lawyers. While both of those professions have the potential for errors and omissions claims, they're not the only ones by any means.

A person who works on computers may advise a client to install a new operating system, update hardware or change to new software. If any of those changes cause the client problems, there's an opportunity for a claim involving errors and omissions.

In general, errors and omissions can be claimed anytime professional advice (or the lack of) results in a financial loss. It may be that the company updated computer systems on the advice of their computer technician, then experienced downtime because the system wouldn't interface with other components. The errors and omissions claim may include lost revenue, cost of the change and cost of changing other components to correctly interface.

Any time you're in a position to offer advice or make recommendations, there's a potential for errors and omissions claims against you. Having an insurance policy to cover you in the event that you do face a claim is simply a smart move.