Errors and Omissions Insurance (aka E&O Insurance) is a must for most IT professionals. Because the work you do has the potential to affect nearly every aspect of your clients’ business, you need to make sure you’re covered in the event that something goes wrong and your client decides to sue – even if you’re not at fault.
But before you fork over too much money for a top-tier E&O policy, be sure to ask your insurance agent these five questions to determine whether you can secure E&O coverage for less without compromising the quality of your protection.
- Will my E&O policy provide me with a lawyer? Some policies provide a lawyer in the event of a lawsuit against an insured party. The benefit of this provision is that it has the potential to save you the time and hassle of hunting down a lawyer who is not only within your price range but also has familiarity handling Errors and Omissions cases for small technology companies. Your agent can help find you a policy that includes legal representation.
- Is my insurer always required to defend me against claims? Some E&O policies are “right to defend,” while others are “right and duty to defend.” The latter type means that your insurance provider is legally obligated to defend you when a client brings a case against you; with the former type of coverage, your provider has greater leeway to deny resources for your legal defense. For fuller security, look for a “right and duty” clause, unless your agent advises otherwise.
- Are my contractors covered under my E&O Insurance? Many Errors & Omissions policies extend coverage to 1099 contractors working with your company. This type of coverage is important if you work with contractors, as your company could be held liable for anyone doing work on your behalf.
- Will I be covered even if the claims against me are groundless? In most cases, your E&O Insurance will cover you whether or not the claims against you are well-founded. To be sure that your coverage extends to events when you’re not at fault, though, check with your insurance agent.
- Will my E&O track record affect my insurance rates? This is a key question for anyone seeking E&O Insurance for less. In some cases, maintaining a clean lawsuit record and taking certain precautionary measures (such as implementing good contracts practices) may help keep your E&O premiums to a minimum.
Still have questions about whether you need E&O coverage to protect your professional work? Post them in the comments and we’ll do our best to answer!