Do you offer a professional service? Then it is likely you need errors and omissions insurance, also known as E&O. That’s because no matter what kind of business you operate or service you provide, it is quite possible that at some point in your career you will make a mistake. Even if it’s a “simple” one, you could find yourself facing a liability claim from someone who claims that your mistake, inadequate work, negligent actions, or your failure to provide a portion of expected services, caused them financial loss. Now their claim could put you and your business at financial loss, unless you have the proper coverage.
The policy protects you and your firm by covering the cost of court fees, legal defense, and even damages payable to the plaintiff in the event of a lawsuit. This type of coverage is not included in the basic general liability or property insurance policy, so adding it to those coverages helps round out your protection bubble all the way around. This concept became very real when the owner of Paula’s Pets-let’s call her Paula-had a close shave when she got a bit too enthusiastic during a haircut for an owner’s prized poodle that was being groomed for a major dog show. Paula was very skilled, but on this occasion not only did she accidentally trim the dog’s fur in the wrong formation, she nicked one of the dog’s ears with her clippers when the animal (known in the prize ring as Dartagnan Malachi Show Me the Money), ruining the animal’s chances at appearing in the dog show that weekend. The owner was livid and vowed to sue Paula for everything she had. Her bootstrap business, which was just a few years into operating and had just started turning a profit, would never have been able to withstand paying out of Paula’s very shallow pockets for legal defense. Fortunately, the policy she’d purchased at the advice of her professional insurance agent meant that she had to pay only a small deductible and the insurance covered the rest, saving her $15,000 after all was said and done.
It is important to talk with a professional insurance agent to understand how much E&O insurance you need for your business. Your agent has access to top-rated coverage providers yet because policies are not necessarily apples-to-apples comparisons, your agent can offer experienced advice about which policy offers you the best bang for your buck. He or she can also ensure that your coverage is renewed on time so you won’t have any lapses in coverage. Call your agent today.