The WoW Style

If you’re a business owner, you understand how intricate it can be to establish a company. Building permits, operational licenses, and financial reports are just some examples of requirements you will need to set up shop. There are so many federal, state, and local procedures and regulations that it can be challenging to stay up to date with everything.

An essential part of a successful business is acquiring the right insurance. Being prepared for the unexpected can save time and money. The most common policies for every business owner are general liability and property insurance; both are vital to protect against claims made for injury/damage to a person or physical property.

However, most business owners overlook a very important policy—errors and omissions insurance—until it is too late.

What is E&O Insurance?

Errors and omissions insurance (otherwise known as E&O insurance) is a type of professional liability insurance that protects companies against customer claims regarding the product or service they were hired to provide. Such complaints may involve negligence, malpractice, and misrepresentation and are generally related to incomplete, late, or unsatisfactory work.

Essentially, this policy covers your company for errors or omissions that you or your workers have made when providing a service or for errors or omissions that the client perceives you have made.

E&O generally covers settlements, judgments, and defense attorney costs. Who needs errors and omissions insurance? Most companies could benefit from the coverage, but the most common holders of this insurance are small businesses that provide professional services or advice directly to clients, such as lawyers, doctors, attorneys, and professional consultants.

Here are some cases where E&O insurance coverage can make a difference.

1. Medical Negligence

A doctor’s routine is particularly challenging, often forcing the professional to make decisions that can cause serious injury and even the death of a patient. This is more common than it seems; in 2016, the average number of lawsuits alleging medical malpractice was 17,000 a year.

Let’s say you treat a patient, and that patient goes home and dies later that night. Nobody wants this to happen, but medical center operators run this risk. That patient’s family may sue you alleging negligence or malpractice.

Medical negligence can occur during diagnosis, during treatment, or even through advice given by the professional to the patient. Whatever the case, E&O can protect you by helping pay for settlements.

2. Media Scandal

E&O insurance is essential for an author or publisher. If your writing is successful, you will doubtlessly encounter claims of copyright infringement, privacy invasion, or plagiarism. A few years ago, for example, author Dan Brown was accused by three separate parties of plagiarizing their work when writing his bestseller “The Da Vinci Code.” None of the cases have been proven, but the media scandal they caused, and the time and money spent, are considerable.

The same goes for bloggers or website writers. As soon as their work becomes public, it can reach many people quickly and motivate claims of this kind.

Errors and omissions insurance can help you pay any judgments or agreements arising from copyright infringement, plagiarism, etc.

3. Unhappy Legal Clients

If you own or operate a law practice, you always want your client to win. However, this outcome doesn’t always come to pass. As a result, you may gather some unhappy clients along the way. They can sue you for legal malpractice—when a former client is dissatisfied with the trial or sentence received—or even because they consider your fees to be too high or unfair.

In these cases, E&O insurance can cover the costs of defending yourself against unhappy ex-clients.

4. Wedding Planning Mishap

E&O insurance is essential for event planners in general, particularly those organizing weddings, as this type of event is associated with emotions and many involved parties.

For example, this mishap could entail a mistake with dates, such as a wedding planner organizing the entire wedding ceremony and reception for a certain date, but it turns out the bride and groom scheduled the ceremony for the following week. In this case, E&O insurance can help you refund any outstanding payments you have made for the previous date.

Likewise, the flowers you hired for the ceremony never arrived or were accidentally exchanged for another flower order. Your customers may sue you for financial loss and even emotional suffering, and this insurance coverage is essential to assist you in the process.

5. Shipping Issues

Finally, shipping companies can also benefit from E&O insurance coverage for many different types of cases, such as delays in shipping caused by an employee who missed the address, failure to collect or deliver an important order, negligence during transport, etc.

All these mishaps can cost customers money, time, and even their own clients, and they will hold you responsible for negligence. If you don’t have errors and omissions insurance, the whole process can be costly.

Don’t Make Errors or Omissions When Acquiring Insurance

Let’s be honest: nobody wants it, but mistakes can happen. If an unsatisfied client sues you for negligence or inaccurate advice, not having the proper insurance coverage may cause you to face a whole, exhausting process by yourself.

E&O insurance covers most mistakes you or your employees may accidentally commit while providing a service, and it is a policy to consider when you work as a lawyer, architect, engineer, accountant, etc. In addition to avoiding possible legal problems, having the proper insurance coverage also helps you build an image of security and professionalism.