If you own a business, you likely have general liability insurance, property coverage, and workers’ comp to protect your assets
But if your business provides a service, you may have additional liability for your professional work that isn’t covered by these other policies.
Professionals that offer advice, instruction, consult, design, or complete other services have risks around the work they perform. You may omit something by mistake or give advice/instruction that a client contends is erroneous. This is a common concern for professions such as accountants, doctors, lawyers, architects, realtors, designers, etc., but others may be at risk as well. And even if you’re an expert in your field, mistakes happen. And if your client believes a mistake in your professional services caused a financial loss, they can sue you.
Also known as errors and omissions insurance (E&O), this coverage can help protect almost any service-based business against these lawsuits, including claims of negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. E&O insurance can help your business cover:
- Costs of legal defense
- Claims or judgments levied against you
- Licensing penalties
- Copyright infringement
- Other industry-based concerns
Policies are typically “claims made”, meaning they offer coverage if the policy was in effect both when the event took place and when a lawsuit is filed for a claim to be paid. The amount you need for coverage depends on your potential for liability. Larger businesses or those conducting larger financial transactions have greater risks. Some service businesses sign contracts or agreements that not only require E&O coverage, but may have a certain limit required in the policy.
There are commercial insurance packages include options to add professional liability, but many businesses purchase E&O as a standalone policy. Our agents can discuss your risks for professional liability and the options for coverage that are best for you. Give us a call and let’s discuss it!