If you use Google, you’ve probably noticed the blue dialog bar that’s been appearing on the search engine’s home page announcing updates to its Terms of Service. One of the most significant changes being introduced is that the site will start displaying, alongside ads, user reviews from people in your network (with names and pictures).
In other words: starting next month, when you search steak houses in your zip code and an ad for Outback pops up, that ad might include a review from one of your Google+ connections, complete with his or her name and G+ profile image. (Read more about the changes in the TechRepublic article “Changes to Google Terms of Services Coming in November 2013.”)
If that sounds a little too cozy to you, don’t worry: you can deactivate the feature. And that deactivation option, along with the early warning notifications and tips for managing data privacy, demonstrate Google’s adroitness at managing its Errors & Omissions exposure and avoiding potential E & O claims.
Here’s a look at what you can learn from the search giant.
E and O Risk Management Costs Less than a Lawsuit
While Google may enjoy more forgiving financial margins than most independent IT contractors, it still has to enact policies that prevent losses wherever possible. That means preventing avoidable expenses (including Errors and Omissions lawsuits) by savvy risk management. (For more on avoiding E&O lawsuits, read the blog post “5 Ways Web Programmers Can Be Sued.”)
Take a page from Google’s book to protect your company by…
- Warning clients about changes to your services and / or policies. It’s the nature of small businesses to evolve quickly. Depending on where you are in the development of your company, you may be implementing major changes on a monthly, weekly, or even daily basis. Regardless of the pace of change, it’s essential to manage client expectations by communicating about changes as you make them. This is particularly important if you plan to change the services you offer, the prices you charge, or the ways in which you store and / or process their sensitive information. When you keep your clients posted (preferably in writing), you prevent allegations that you breached contract or failed to fulfill the terms of an agreement, both of which would fall under the category of Errors & Omissions claims.
- Respecting your clients’ privacy. Google makes most of its money through advertising revenue, and it’s safe to assume that personalized ads (such as the ones it plans to start publishing next month) have the potential to convert better and thus bring in more revenue than generic ones. Despite this, Google also recognizes that it would antagonize huge swaths of its user base by failing to provide a way to opt out of uber-public reviews. Whether you’re interested in using client testimonials or case studies of specific projects, you’ll get better results (and avoid potential E and O allegations) by giving your clients the option to remain anonymous. Often, knowing they have the power to protect their privacy is enough to reassure clients whose information you’d like to share.
- Helping clients manage their cyber liability exposure. Perhaps because of the ubiquity of data breaches, Google included in its Terms of Service update a reminder about using strong, unique passwords and being careful with mobile devices. As an IT professional, providing reminders like these is an essential risk management technique. Why? Because you could face third-party cyber liability for data breaches to your clients’ systems if their lawyers can convince a judge that your work or negligence was responsible for the incident. In some cases, negligence can mean not providing adequate risk management training to a client’s employees.
What Kind of Errors and Omissions Coverage Do You Need?
Many IT consultants, sole proprietors, and small-business owners question whether their E&O exposures are actually significant enough to merit putting E&O coverage in place. The simple answer? Probably. Here’s why: there’s a good chance your prospective clients require E&O Insurance in their contracts.
Beyond maintaining an insurance policy, it’s key to manage your E&O risks by keeping lines of communication open with the people you serve. Communication can prevent E & O lawsuits by making you aware of any dissatisfactions your clients have before they become large-scale problems.