Errors and omissions (E & O) insurance can help to protect your business and personal assets from lawsuits alleging professional misconduct, negligence or poor performance. Any business or professional practice that provides a service can be at risk for this kind of suit. Cases typically involve a customer claim that services were not provided as promised, errors were made, important information was ignored, or the work was not managed properly. Commercial insurance usually will not cover the cost of these legal actions.
Even if a claim has no justification, the cost of defending a business or professional practice can start at $50,000 and escalate from there. E&O insurance can help to pay for legal fees and court costs. It also may pay some or all of a settlement.
E & O coverage exists in many forms. Some policies focus on a specific kind of professional liability, such as medical malpractice policies. Others are written more broadly, but it is very important that business owners purchase a policy that will cover their specific risks. An independent insurance agent can help you navigate the kinds of E&O insurance available, and find a policy that meets your needs.