Businesses that offer professional services to clients must purchase Errors and Omissions (E&O) insurance. A company without E&O insurance may be liable in many different insurance claims.
What Situations Does E&O Insurance Cover?
There are many scenarios where this insurance coverage is imperative. Let’s look at some of the most common E & O claim examples.
- Inaccurate documentation or communication – You can never assume that a client understands all of the information without properly communicating it. You must provide the necessary information in writing or you might get sued if something is misunderstood.
- Breach of duty – It is critical that your clients receive all goods and services they have purchased in a timely manner. Otherwise, you may be liable for breach of duty.
- Misrepresentation – If misinformation results in your client have lost financial compensation or harmed reputation, then you might be sued for intentional or fraudulent misrepresentation. A common example of this is when a company overstates its capabilities or expertise.
E&O insurance claims can also stem from failing to fully address what services are provided. A thorough needs analysis will help to pinpoint any problems that could arise in the future.
There are many situations in which E&O insurance is critical to your business. Make sure you are prepared for any circumstance.