A Guide to Errors and Omissions Coverage

As a business, you need to have all the right insurance in the case of an emergency. This includes errors and omissions coverage, which is necessary for all businesses that give advice, quotes, or professional services which could be questioned. You may have also heard it called Professional Liability insurance.

It is important that you are insured in the case of a lawsuit based on professional neglect or incomplete or unsatisfactory work. Often times, an allegation of this level can spring from loss of client data or false performance claims. If this ever happens you want to be completely covered. In the case that it is a false accusation, you don’t want to be caught without protection.

Errors and omissions coverage will change depending on what your business does and the field you are in. Every policy will look different, including the necessary defense costs, infringement coverage and copyright insurance. Unfortunately, any customer has the right to sue your business if they feel your company has not done the job they were promised at the start.

First you want to consider the coverage limit for defense charges. You’ll need to make sure you are covered for all defense costs and for money lost during court time. If you work in an industry where your customers are able to fickle with the results, you want to be armed with all the financial help you can get. Although you may not believe your services to be faulty, claims of omission and error can be very objective, putting you on the defense no matter what.

If you have employees working under you, you want to be sure they are covered as well. Anyone who has filed ad W2 should be under your professional insurance. You should also think about having your subcontractors covered. However, you may not be able to file them under your coverage. In this case, they’ll need their own insurance.

Although you may not have considered it, coverage for copyright infringement is also a smart idea. Included in this is intellectual property infringement. In the case that someone files a claim on the grounds of encroachment, your business could be ruined. Coverage protects you from any allegations made by competitors such as theft of business model, or sour clients.

There are a variety of intellectual property insurances you can acquire, and some may be necessary depending on your field of business. Your options include patent insurance, patent infringement liability insurance, and advertising injury coverage. While you may not need all these, they are available as a means of protection for the business as a whole.

Purchasing errors and omissions coverage is necessary for most business. Customers can file a lawsuit for almost any indiscretion, and competitors can become petty with patent infringement. In the case that either of these happens, you don’t want to be forced to shut down, file bankruptcy or destroy your reputation. Please check our list of approved vendors for your errors and omissions insurance.