What is errors and omissions insurance?
Errors and omissions (E&O) insurance protects professionals, workers, and small businesses against claims made by clients that may result in costly lawsuits due to inadequate work or negligence.
Should a client ever suffer a loss because there are errors in your work, a deadline is missed, or a crucial element that was required is missing, they may make claims against your business. Having E&O insurance can help protect your business from the financial ramifications of such claims.
How does having this coverage protect my business?
The purpose of errors and omissions insurance is to protect businesses, professionals, and workers from costs associated with lawsuits and losses a client may suffer due to an error or mistake made in the work produced or advice given.
E&O insurance covers the cost of court and settlements specified in an insurance contract. This means that if a client makes a claim against a business, instead of the business having to pay the full amount of the claim, the business’ policy may cover the full amount, depending on the insurance contract they have.
Do home-based businesses need E&O insurance?
Whether you run a business from your home or a commercial space, having E&O insurance protects you if you’re sued for errors and omissions arising from negligence. Legal costs and settlement fees can be financially devastating to any business, big or small. Having this coverage may help your business financially survive if it has to pay any legal costs or settlement fees.
Are you insured against accidental negligence?
Professionals from across Canada who provide a service or advice may need E&O insurance in order to cover their risks. Professions that should consider adding on E&O coverage to their policy may include:
Protecting small businesses across Canada
E&O insurance protects a business against the costs of a claim made by a client for a paid service or advice. Whether you’re based out of Ontario, Alberta, or British Columbia, lawsuits can be incredibly expensive, and if a business should ever find itself on the hook for payment, there’s a chance the following may happen:
- A business may not have enough funds to cover the cost, forcing it to go out of business or sell.
- A business may take a long time to recover financially and due to financial constraints, hinder business operations or keep the business from growing.
What is the difference between errors and omissions insurance vs professional liability insurance?
These two terms are used interchangeably. Errors and omissions or professional liability insurance function the same way: they both protect professionals, workers, and small businesses from mistakes that are made that may result in costly lawsuits.
How much does E&O insurance cost?
- The type of business you have
- The location
- Claims history
To learn more about the kind of coverage your business needs and how much it will cost to protect it, you can get a quote online by answering a few questions about your business. If you still have more questions or requirements, we’re always happy to chat! You can give us a call at 1-844-429-9480.
How can I protect my business from an E&O claim?
The best way to protect a business from having a claim filed against it is to stay on top of the service or advice being given. To avoid making mistakes, it’s important to do the following:
Review the work: Dedicate some time to ensure the work that is being delivered to the client is what was agreed upon. Doing this at every stage may be tedious, but will pay off in the final product.
Stay on track: Keep track of important deadlines and ensure there’s enough time to get everything done, especially if there’s more than one client waiting on deliverables. Project management software may be useful in helping keep track of deadlines and there are plenty of free and low-cost options available.
Be organized: Businesses should have a written and signed contract that details what clients can expect, along with dates for deliverables and fees. All documentation and paperwork should be kept in the same location, whether it’s printed or stored digitally.
Stay in touch: Days can go by very quickly for a busy business, which may mean that communicating with a client on a project or service isn’t always a top priority. Depending on the business and the client, that may or may not be okay. That’s why it’s important to set clear expectations for how and when you’ll communicate at the start of each project.
Businesses can benefit from doing regular follow-ups with their clients by letting them know about the status of the work that they’re doing and giving them an opportunity to collaborate with them. If something is going to take longer than anticipated, the client will have a better understanding as to why and be able to adjust their expectations.
Do I need E&O coverage when I get a quote?
Mistakes are inevitable, and they can happen in the blink of an eye. Getting errors and omissions coverage from a trusted insurance company gives you peace of mind that a small error won’t amount to something larger down the road and put everything you’ve worked so hard to build in jeopardy.
What other coverage options are important for small businesses?
Insurance protects, but it’s not always easy to understand. Here’s a quick breakdown of coverage options that might be important to you:
Cyber risk and data breach coverage: Large businesses aren’t the only target for cyber crime. If your business relies on technology and collects sensitive information such as customer data, having this coverage may help with covering expenses associated with managing a breach.
Commercial property insurance: You probably rely on certain tools, equipment, or technology to run your business. If something you rely on gets damaged or needs repair, this may hinder your business operations. Having commercial property insurance can help with repair and replacement costs as well as other unexpected losses your business may encounter.
Commercial auto insurance: Your personal auto insurance policy may not be able to protect your vehicle in the way that your business needs. If you or your employees use a vehicle for business, this is a coverage that may be important to consider.
The needs of all businesses differ, so what may be necessary for one company, may not be the necessary for yours. Build your custom quote today and you’ll have a better understanding of what your business needs to be protected.