Cover Your Assets with Errors and Omissions Insurance

Errors and Omissions insurance quotes, or E&O for short, isn’t another product the insurance industry ginned up to squeeze a few more bucks out of you. It’s a fundamental need for just about every business owner, especially if you manufacture a product or provide a service for a fee. If you have investors, they’ll probably insist that you have EO coverage, as will clients of certain types of businesses – notably advertising and public relations agencies. Errors and Omissions insurance is a type of Professional Liability insurance and provides some very important coverage that typically isn’t included in your Commercial General Liability policy.

Basically, Errors and Omissions insurance protects you should a client or customer decide to sue you for damages resulting from a service or product you, your employees or independent contractors acting on your behalf provided or failed to provide as promised. It also covers you in the event a product or service didn’t deliver as promised or reasonably expected. It’s the businessman’s version of the malpractice insurance taken out by doctors, dentists and lawyers.

Errors and Omissions policies should cover the costs of legal judgments brought against you, any settlements involved and defense attorney fees. In our increasingly litigious society, even if you’re found blameless, the price of proving it could bankrupt you. Shop around for Errors and Omissions quotes and you’ll likely come to the conclusion that this is a small price to pay for the peace of mind of knowing you can’t be put out of business by a cranky customer. There is no one-size-fits-all EO policy. The type of business you’re in will direct the amount of Errors and Omissions or Professional Liability insurance coverage you need. The greater your exposure to risk, the more coverage you’ll need.

Before you buy, be sure to read the fine print to see if there are exclusions on your Errors and Omissions quotes. Some policies exclude punitive damages, for instance. These are defined as a “a court-awarded sum that is considerably higher than the measurable value of the injury.” They’re intended to punish the offending party for reckless behavior. You can take some proactive steps that may net you more affordable Errors and Omissions quotes. These include being able to produce a well-written, comprehensive client contract and demonstrating that you have quality control procedures in place.


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