Every business owner understands how important insurance is to keeping everyone involved legally protected and safe. From employees and 1099 employees to your business and you individually, the right insurance coverage can help protect from a financial disaster following an accident. Here, we’ll take a look at one insurance of particular interest: Error and Omissions Insurance.
What is E&O Insurance?
Error and Omissions (E&O) Insurance is a special form of liability that protects against any losses that wouldn’t be covered by a standard liability insurance policy. It helps to protect your business and person from claims that might result from a client suing due to financial loss resulting from errors, omissions, or negligent acts that resulted while performing business-related activities.
Who should get E&O insurance?
In general, anyone who is in the market, offering a service for a price to clients, will need to get this sort of coverage. Sheet metal workers, HVAC installers, plumbers, electricians, and other contractors are the “standard” example for workers who typically require E&0 insurance.
Can this insurance be customized?
While all businesses need to be protected financially with certain policies, that doesn’t necessarily mean that the fingerprint and coverage will be identical. Fortunately, E&O insurance can easily be customized to meet the specific requirements of each industry and business. For instance, an electrician and printer will both opt for E&O insurance, but the exact type of coverage will differ depending on their personal and industry-related needs.
Who does E&O insurance cover?
While the specifics of coverage always depend on the details of your agreement, there are some general takeaways that can be learned about the typical E&O policy. Generally speaking, these policies cover you as the business owners, any hourly and salaried employees you currently have working for you, and subcontractors that are working for your company.
What does E&O insurance cover?
Errors and Omissions Insurance typically covers court fees and settlements that arise from the proceedings. Businesses can quickly go under if a lawsuit is brought up without the right safety measures in place. With E&O insurance in place to handle some of these costs, companies can better handle unforeseen instances. As mentioned before, the specific coverage types and amounts will depend on your particular policy.
Is it mandatory to have E&O insurance?
Any business that’s open to potential lawsuits should protect themselves with E&O insurance. It’s a small price to pay for safeguarding against a scenario that could end up costing millions and might even take your business under. Be sure to speak with a reputable provider to determine what kind of policy is best for you and your company.
Errors and Omissions Insurance helps protect companies and business owners from lawsuits that arise from accidents on the job. Although this coverage is an added expense, it provides invaluable protection from proceedings that could cost you your business in the long run. Always make sure to read your policy in detail to understand the specifics.