For clients providing a service, it’s fast becoming essential to have Errors & Omissions insurance. Coverage is key to winning contracts - even a claim against an innocent client can hurt a company.
Building a business and a reputation takes time and hard work. From companies small to large, if your clients are providing a service for a fee, they have an errors and omissions (E&O) exposure and need to consider what will happen if this service is not done correctly or harms their reputation. Businesses may be held responsible for an error or a negligent act that results in a costly claim or legal action. Mistakes can be made, and when there is potential for a third party financial loss, E&O insurance is needed.
Top four reasons to buy E&O Insurance:
- E&O insurance covers legal cost whether your client is at fault or not. As a single case can cost tens of thousands of dollars, E&O protects the Insured from suffering a financial loss.
- E&O coverage would compensate for a portion of the damages issue by the court.
- Contractual obligation. Businesses are now requesting contractors carry a certain type of insurance in order for them to win the contract.
- The most common reason that a person would purchase E&O insurance is to ease his or her mind.