Small business owners have much to consider when planning for business growth. One of those considerations should be purchasing errors and omissions insurance to protect your enterprise from risk. This policy covers scenarios general liability doesn’t, safeguarding your company against a reduction in worth, diminished sales, and closure.
How Errors and Omissions Insurance Works
Errors and omissions policies, also known as E&O or professional liability insurance, are a kind of business insurance. They cover claims of error, negligence, or mistakes in your professional advice or services.
Clients may sue the provider if they incur physical or financial harm from goods or services. When this occurs, you can file a claim with your insurer to cover legal fees. Doing so means you don’t have to dip into your business budget, which could strain your daily operations.
How E&O Insurance Helps a Growing Business
Certain companies must have errors and omissions insurance because their state requires it for their industry. Medical professionals fall under this category. Some clients, such as government agencies, may only contract work from businesses with verifiable coverage.
Even if the above situations don’t apply to your company, you should still consider getting E&O coverage. Every business has liability risks, and getting the right policy minimizes the impact on your growth.
Coverage
E&O insurance covers a wide range of scenarios, including:
Contractual disputes and breach of contract
Professional mistakes, product liability, and negligence claims
Misrepresentation and failure to deliver promised goods
Regulatory violations, employee actions, and third-party claims
Copyright or intellectual property claims
Being sued for harm caused by a data breach also falls under errors and omissions coverage. Cybersecurity is essential for all commercial enterprises, even startups and mom-and-pop shops. Customers entrust you with their personal information anytime they order a product or request an estimate online. A data breach can significantly impact customers’ lives, and they may seek compensation for the fallout.
Benefits
First and foremost, errors and omissions insurance saves you money. Lawsuits can get expensive, between paying for an attorney, drafting documents, and covering filing fees. These costs can add up quickly, especially if the case goes to court.
Insurers also cover settlements should both parties come to an agreement without going before a judge. They can even pay out judgments if the case doesn’t end in your favor.
E&O insurance can also save you significant time. Insurance companies handle hiring a lawyer and usually have a few they work with regularly. They also track filing deadlines and necessary paperwork so you can focus on running your business.
Finally, having a professional liability policy gives partners and investors confidence in your company. They know that partnering with you won’t pose a risk to their bottom lines, making them more likely to build a mutually beneficial relationship.
Grow Confidently With Errors and Omissions Insurance
Errors and omissions insurance provides a safety net for growing businesses. Extended legal costs can interrupt expansion plans, even if you do well in your industry. Every company faces risks, and the proper coverage keeps your business from facing them unprotected.
Securance can help you obtain comprehensive coverage. To learn more, contact a Securance agent today.
About Securance
From our home base in Texas, Securance serves the insurance needs of clients throughout the country and abroad. With 50-plus years as a trusted advisor to businesses, families, and individuals, we help clients safeguard their hard work and step confidently into the future, knowing they are well protected. Contact us today at (713) 977-6606.
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