Errors and Omissions Insurance - Coverage You Should Count On

In business, errors and omissions are a very common occurrence. And with the propensity of people to file a lawsuit when things go wrong, errors and omissions insurance is something almost every business owner should consider as part of the protection for the company and the individuals.

Errors and omissions insurance is a separate insurance policy that covers you in the event someone claims you are liable for any of several types of actions. It could be that you're accused of being negligent, or simply that you failed to take some action - otherwise known as errors and omissions.

Many professionals need errors and omissions insurance coverage. From the person who makes recommendations as their only job to the person who simply offers advice revolving around installation of the product their company sells, almost every professional has the potential for making a minor mistake that could lead to a major lawsuit.

Think it can't happen to you? Think again. How many times during the course of your business day do you explain to someone what your company can do for him? A simple slip of the tongue could be enough to produce an errors and omissions claim. Failure to explain in detail the scope and limitations of your services can lead to an errors and omissions claim.

Consider another situation in which errors and omissions claims may be filed. What if you're responsible for working on computer components and during the course of your work data is lost? You may also be charged with non-performance - that you didn't perform the work that you'd promised to do. It may be nothing more than a misunderstanding of what the client expected, but the lawsuit will be very real. Even managing to prove your innocence can be expensive.

So what can come from a lawsuit alleging errors and omissions? The claim will likely be limited to loss of revenue and damages suffered as a direct result of your actions, but that in itself can become quite expensive. Having errors and omissions insurance will protect you, your company and your employees.

The one other major expense is the legal defense if a claim is filed against your company. If that happens, you'll be facing attorney expenses, court costs and filing fees. An errors and omissions policy will pay your legal fees within the limits of your policy. With the high costs of a legal defense, can you afford to be without this important insurance coverage?