As a business owner, you may be familiar with errors and omissions insurance, and how it protects you or your business in the event that a client pursues a claim based on what they perceive to be an error or omission on your part. Or maybe you’re asking, “What is errors and omissions insurance?” In brief, this type of coverage is intended for anyone who charges a fee for a professional service, and it guards you and your business if a client experiences some type of financial loss due to your actions. It’s commonly misunderstood, however, so here’s a look at some common myths about what’s often referred to as E&O insurance.
Myth 1: You Don’t Need E&O Coverage if You’re Great at Your Job
Even the smartest people on the planet make occasional mistakes. No one is exempt, and this is the type of mindset that gets you in trouble in the first place.
Myth 2: You Don’t Need E&O Insurance if You’re a Consultant
If you sell your professional advice, this constitutes as a service in the eyes of the law. If you make recommendations to a client and they don’t pan out as you’d thought they would, they could potentially hold you responsible.
In truth, almost anyone who operates a business is at risk for E&O exposure. Now that you know just what is errors and omissions insurance, ask your insurance agent if it’s right for you.