Errors & Omissions insurance, or E&O, is a type of coverage that many professionals overlook when they evaluate their insurance needs. Many people have faith in their abilities and doubt they will ever face a liability claim. However, just one claim can have lasting consequences. Most professionals need Errors & Omissions insurance for the following two reasons.
1. Protection Against Unwarranted Claims
Even professionals who perform their services well may face wrongful claims, and the cost of mounting a good defense against those claims may be high. An E&O policy will pay defense costs regardless of whether the policyholder is later vindicated or found at fault. People who are truly concerned about frivolous charges should elect for First Dollar Defense. Under this addition, the policyholder only pays his or her deductible if he or she is found at fault; otherwise, the insurer covers the full cost of defense.
2. Offsetting the Cost of Innocent Mistakes
Unfortunately, at some point, most professionals will make an innocent mistake that leads to substantial client losses. Subsequent defense and settlement costs can be devastating for anyone from a small business owner to a high net worth individual who provides valuable services. E&O is truly the only way to protect against these inevitable errors.
Ensuring Full Protection
Professionals who currently lack a professional liability policy should work with an insurance agent to choose or customize one. Mistakes or client misconceptions can happen at any time, and the resulting claims can be devastating for professionals caught without appropriate coverage.