As a provider of professional services, your clients expect you to have adequate coverage for errors and omissions, or E&O. This type of coverage, also known as professional liability insurance helps protect a company from claims and lawsuits based on work product or deliverables. For example, an engineering firm would have E&O insurance to protect them from lawsuits based on a design flaw in a product they sold. Whether the flaw was due to wrong information, missing details or poor judgment, it resulted in damages for a client, resulting in a claim.
What Are Some Common Reasons for E&O Insurance Claims?
Lacking sufficient professional liability insurance threatens your business in the event of a claim. These are some of the most common causes of E&O claims:
- Poor communication and documentation
- Misrepresentation of qualifications
- Insufficient coverage limits
- Failure to fulfill contractual obligations
An errors and omissions lawsuit can arise from more than just a mistake in a deliverable. Even if you have an existing policy, it’s your responsible to make sure that it’s adequate for the contracts you secure and the risk associated with delivering to your clientele.
What Else Should I Consider?
Other environmental enterprise considerations clarify the need for E&O insurance. Evolving technologies, emerging markets and the use of global collaborative teams present risks to companies’ deliverables. Find an insurer that can put together insurance products that fully address your needs.