Companies can be blamed for various types of wrongdoing that can lead to a request for compensation: failing to accomplish set tasks, providing incorrect advice, failing to achieve performance targets, violating a contract or a professional obligation, etc.
Errors and omissions insurance protects the policyholder from the financial consequences that may be incurred as a result of an error, omission, negligence or malpractice committed by themselves or a member of their team. This means that if needed, the insurer will take on the costs of defending the insured professional if they are sued, as well as any compensation or interest that the professional is legally required to pay.
Be sure not to confuse errors and omissions insurance or professional liability insurance with general liability insurance!
Beyond these essentials, any company that provides professional services or advises clients should consider this insurance, since no one is safe from an unhappy customer!
Note that you can tailor your coverage to your field, even if it is a niche industry. This way, insurable “professional services” can be defined in your contract.
Riders, or coverage extensions, can also be added to further improve and personalize your insurance policy. It is also important to note that insured trades and fields, as well as exclusions and deductible amounts, vary considerably from one insurance company to another. This is why it’s important to get good advice!
In order to ensure that you are properly covered by E&O insurance, speak with an independent insurance broker. They will use their expertise to conduct an in-depth analysis of your company’s situation, advise you on the right coverage and work with insurance companies to find the right insurance for your needs, at the best possible price.
