Simply put, Errors and Omissions (E&O) insurance is a policy that protects you when a client suffers financial loss or damage to their reputation because of something you did – or failed to do. That could mean you delivered the wrong product, or the right product to the wrong place, failed to perform your service as expected, or even that a subcontractor you were working with didn't come through on a project.
When people think about who needs E&O insurance, they generally think of professional liability insurance for lawyers and accountants, and malpractice insurance for doctors, dentists, and optometrists However, they are far from the only professions that can benefit from the protection an E&O insurance policy offers.
Do freelancers and small business owners really need E&O insurance?
To determine whether E&O insurance would be a good addition to your insurance portfolio, ask yourself one question: Do you have clients? If the answer is yes, then you should seriously consider getting E&O coverage to protect your business. Too many small business owners believe that E&O insurance is only for the “big guys”, the ones with deep pockets, or that it’s not necessary in their industry.
The reality is that every small business owner has exposure to claims that E&O insurance could protect you from. Event planners, videographers, website designers, copywriters, architects, lawyers: if you deliver a product or service to a client, you have the potential to be sued if you make a mistake that causes your client to lose money or business. In fact, even if you never make a mistake, going without E&O insurance could still leave you open to potentially disastrous outcomes. Even a lawsuit that gets dismissed could leave you with so much debt from legal fees that you’d be forced to close your business, or even file for bankruptcy.
What's the next step?
These days, it’s more important than ever for small business owners to protect the companies they've built from the ground up. If you've been trying to decide whether it’s worth it to seek E&O coverage for your company, take a look at your recent client interactions. If there was any potential for something to go wrong – whether that means a website order form failing on launch day or an event venue you selected cancelling at the last minute – then you could be vulnerable to liabilities you didn't even know you had.
Because every business has different expectations of liabilities, and different processes for making sure that their clients are satisfied, every business has different needs when it comes to purchasing Errors and Omissions insurance.
To learn more about finding the right Errors & Omissions insurance policy to protect your business, give Insurance By Design a call today at 972-499-3414.