Errors and Omissions (E & O): Could This Apply to You?

Everyone makes mistakes, but a professional who makes them could find himself on the receiving end of serious client complaints. In professional terms, some of these mistakes are known as errors and omissions, and they can be very costly.

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 that you do not fully explain the advice you do give, or just that the client doesn't fully understand. Either can be the catalyst for an E & O claim. So what are you supposed to do? One option is to carry errors and omissions insurance.

You may think that errors and omissions coverage would only apply in cases involving such professionals as doctors or lawyers. While both of those professions have the potential for errors and omissions claims, they're not the only ones who do.

A person who works on computers might advise a client to install a new operating system, update hardware or change to new software. If any of those changes causes 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 thereof, results in a financial loss. It may be that the company updated computer systems on the advice of its computer technician, then experienced downtime because the system wouldn't interface with other components. The E & O claim may include lost revenue, the cost of the change, and the 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 errors insurance policy to cover you in the event that you do face a claim is simply a smart move.