Errors and Omissions is a type of insurance that provides coverage for you or your company against the clients that hold you responsible for the bad service. In some cases, it can only be caused by a failure to meet service expectations. The loss you cause is covered by this insurance policy.
Every profession may require errors and omissions insurance. For doctors, chiropractors, dentists. They use to call it malpractice insurance. However, for engineers, architects, lawyers, or accountants, they are referred to as professional liability. The name may be different, but it serves as a general coverage for all. Most of the errors and omissions insurance policy cover settlements, defense costs, and assessment. You can have more information on what E&O policy covers through this site.
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Why You Need Errors and Omissions Insurance?
It is a fact that everyone makes mistakes even with the best employees and the best practices in the workplace. Clients aggrieved can file a lawsuit against you even if problems can be solved. In this case, you will spend thousands of dollars to defend the lawsuit, even if the allegations were unfounded. This accusation can bankrupt you.
If you are a shipper, wedding planner, engineers, marketing managers, doctors, accountants, economists, or belonging to any other profession, you will need errors and omissions insurance policy. Additionally, your reputation in the market will decline because of the proposed law and litigation.