In any industry, professionals are prone to make mistakes. Whether you own a shipping company and an employee fails to execute a time-sensitive order or you are an architect who is blamed for a buildings structural problems, e o insurance can protect your best legal and financial interests in case a mistake is made.
What This Insurance Covers
Typically, errors and omissions insurance covers the cost of legal defense fees and any damage awards that are associated with a professional liability claim. For instance, if you hired a lawyer to defend you in a court of law and it cost you hundreds of thousands of dollars to do so, your errors and omissions policy would kick in and alleviate the burden of covering these expenses on your own.
However, it is important to keep in mind that this form of insurance does not cover all acts of negligence. For example, if professional liability was claimed after one of your employees participated in an intentionally fraudulent or illegal activity, your policy would likely not cover the expenses associated with this offense.
When to Acquire E O Insurance
Remember, your company could be faced with a lawsuit for making an error when you least expect it. If you dont already have professional liability insurance, consider speaking with an insurance agent as soon as possible to discuss your errors and omissions insurance needs.