Who Needs Errors and Omissions Coverage? Blog | Who Needs Errors and Omissions Coverage?
General 03/02/19

Who Needs Errors and Omissions Coverage?

To determine who might need it, Errors and Omissions (E&O) insurance should first be defined. Simply put, E&O specifically provides coverage for any errors or omissions made while rendering professional services. E&O protects you against clients’ claims of financial harm as a result of your company’s actions while performing your service.

You may think that your General Liability insurance fully covers you, but General Liability is only a safeguard against bodily injury or property damage-related claims. Keep reading to find out more about Errors and Omissions coverage: what is it and how does it work to benefit your business?

 

What Sort of Risks Does E&O Cover?

What does Errors and Omissions insurance cover and protect your business from? Clients and customers seeking expert advice will turn to your business’ professionals to offer that information. Having an Errors and Omissions policy protects you against claims that involve:

  • Errors
  • Negligence
  • Omission
  • Misrepresentation
  • Oversight
  • Good faith violations
  • Erroneous advice

 

Who Needs E&O?

So, who needs Errors and Omissions insurance? Certain industries are required by law or employer mandate to have E&O insurance. Such is the case for medical professionals, who take out a form of E&O referred to as malpractice insurance. Other well-known professionals that need E&O include attorneys, architects, and accountants.

E&O, however, isn’t restricted to those fields. If you provide professional services or advice, there’s E&O exposure. Mistakes made by tax preparers, travel agents, or even interior designers can incur pricey repercussions.

From financial planners to wedding planners, Errors and Omissions liability insurance is a necessity across a wide variety of occupations.

Take a look at a few scenarios in which E&O insurance coverage is beneficial:

  • If a shipment is accidentally sent to Mexico as opposed to New Mexico, the client’s sales could suffer, leaving the supplier to compensate for the client’s losses.
  • If a consultant is hired to rebrand a restaurant, but it fails to stay afloat, an aggrieved business owner may blame the brand consultant and file a lawsuit.
  • If a seller states that their home is 2,853 square feet, but the buyer later discovers that it’s 2,538 square feet, the buyer could sue the real estate agent for oversight. The agent could then be held liable for the difference in the property’s diminished value.
  • If a structural engineer inspects a building and gives an imprecise recommendation that results in damage, the contractor could choose to press charges for the faulty advice.

Ultimately, in an increasingly litigious society, no profession is immune from the risk of being slapped with a lawsuit. As a matter of fact, each year, 1 in 3 insurance agents face an Errors and Omissions liability dispute.

 

Why Do I Need E&O Insurance?

To be human is to be imperfect. And, in business, those imperfections can impact your performance. Even if you make no mistakes, you cannot control the actions of your employees or other unforeseen circumstances.

As with all customer service industries, there’s always the possibility that a customer may sue over a perceived problem. The claim that you are responsible for your client’s financial loss can be costly, time-consuming, and mentally taxing to resolve, whether it is legitimate or not. E&O will, however, cover you even if the case is found to be baseless.

While settlements may be a few thousand dollars, several cases assuredly add up. According to an empirical overview conducted by the National Center for State Courts, a typical E&O lawsuit can set you back $140,584. This sizeable sum is only what you would be handing over to your client. If you include the price tag of legal fees, up your total another five figures.

What Are the Benefits of E&O Insurance?
Without an Errors and Omissions policy, you can be left with a hefty bill for damages and legal fees. For small companies, these expenditures can quickly escalate from a minor thorn in your side to your financial downfall into bankruptcy. Even for larger companies, an E&O policy can prevent your resources from being drained. So, if you’re worried about what the average cost of Errors and Omissions Insurance is, remember it saves you the risk of paying more in the event of an attack.

That’s not the only benefit of purchasing E&O:

  • Financial protection – A point worth reiteration. Lawsuits can become steep endeavors. Administrative fees, defense costs, and courtroom reservations can cost thousands of dollars, especially if the case is drawn out. Additionally, you might need to pay for experts or eyewitnesses. Most importantly, E&O can prevent you from having to declare bankruptcy in order to finance large settlements or judgments.
  • Legal advice – In an already stressful situation, E&O can alleviate the burden of having to provide your own lawyer. Or, in some instances, it can prevent you from having to defend yourself, if you lack the funds to retain representation. Through your insurance policy, you can leave the responsibility of researching and hiring a suitable attorney to your insurer.
  • Peace of mind – E&O can imbue a sense of confidence on both sides—for the business and the customer. On your end, you can rest easier knowing that you are entitled to protection should a blunder occur. Clients can feel confident in their interactions with you, knowing that not only would they be compensated should the need arise, but that you have the foresight to anticipate potential mistakes.

 

When Should I Buy E&O Insurance?

The premise of insurance coverage is that you are taking preventative measures. You would not wait for a disaster to strike to establish a safety protocol. The same level of caution should be applied to your business to protect your professional and personal assets.

The takeaway here is to invest in an Errors and Omissions liability policy before you need it.

 

Sources:
  1. Investopedia. Errors and Omissions Insurance (E&O). https://www.investopedia.com/terms/e/errors-omissions-insurance.asp
  2. Insurance Journal. Are Your Files Defensible’ A Look at E&O Risks for Agents and Brokers.
    https://www.insurancejournal.com/magazines/mag-features/2001/11/12/21947.htm
  3. Insurance Journal. The Ins and Outs of Errors and Omissions Insurance. https://www.insurancejournal.com/magazines/mag-features/2004/07/19/44745.htm
  4. National Center for State Courts. Caseload Highlights, Examining the Work of State Courts, Volume 11, Number 1: An Empirical Overview of Civil Trial Litigation.
    https://cdm16501.contentdm.oclc.org/digital/collection/civil/id/24
Blog

Tips for protecting yourself and your business.

Healthcare

Malpractice Insurance FAQs: What Is a “Retro Date”?

Pharmacy

Why You Should #ThankAPharmacist This Month

Mental Health

Why School Counselors Should Consider Malpractice Insurance

Insurance Basics

Am I Legally Required to Get Small Business Insurance?

Occupational Therapy

Liability Risks for Occupational Therapists

Insurance Basics

What Are the Exclusions on a General Liability Insurance Policy?

Nurses

Nurse Liability Insurance: 7 Reasons to Get a Policy Even If Your Workplace Is Covered

Lab Technician

Four Common Mistakes Lab Techs Make

Pharmacy

Upskilling and Reskilling in Pharmacy

Insurance Basics

How Can I Reduce My Professional Liability Insurance Cost?

Healthcare

Is Administrative Staff Covered by Medical Malpractice Insurance?

Mental Health

What Can Happen if a Clinical Counselor Doesn’t Carry Malpractice Insurance?

Mental Health

Mental Health Technicians Are More Important Than Ever in 2021

Mental Health

Why Every Counselor Should Have Malpractice Insurance (Even If You’re Just Starting Out)

Consultants

Five Reasons Why Marketing Consultants Need Insurance

Speech Therapist

Speech Therapist Insurance: What Do You Need to Cover?

Insurance Basics

General Liability and Workers’ Comp: What’s the difference?

Event Planning

What You Need to Know About Planning Your Comeback Event

Event Planning

Top Tech Tools for Hosting a Hybrid Event

Mental Health

Are You at Risk? Four Potential Liabilities When You’re an Uninsured Drug Counselor

Consultants

Consulting in the Tech Field? This is the Insurance Coverage You Need

Event Planning

How to Use Virtual Reality for Your Hybrid Event

News

Bold Penguin and NOW Insurance Partner to Make Professional Liability Insurance Easier to Quote and Bind

News

Matt Higgins Joins NOW Insurance as Executive VP of Engineering

Event Planning

Planning a Conference? You Need Event Insurance

Consultants

Five Steps to Buying Consultant Business Insurance

Nurses

Nursing Board Discipline: Know the Process

Event Planning

Eight Things Commonly Forgotten by Event Planners

Event Planning

Hybrid Events Are the New Norm – What Should Event Planners Know?

General

How Much Is Professional Liability Insurance? 6 Factors That Affect Price

Mental Health

Providing Peace of Mind: Insurance for Mental Health Workers

Mental Health

7 Reasons Rehabilitation Counselors Should Get Malpractice Insurance

Pharmacy

Pharmacy Technician: What’s Next?

Consultants

Common Mistakes When Starting a Consulting Business

Mental Health

8 Reasons a Family Counselor Should Be Insured

Mental Health

Professional Liability Insurance for Mental Health Technicians: What Does It Cover?

News

NOW Insurance Partners with Hiscox on Medical Malpractice Insurance

Healthcare

What to Know About Multi-State Healthcare Licensure

Healthcare

6 Risks of Being a Substance Abuse Counselor Without Malpractice Insurance

Healthcare

What Are the Best Upskilling Opportunities in Healthcare?

Healthcare

How Virtual Care Expands Access to Specialists

General

Thinking of Becoming a Therapist? 5 Things to Know

Healthcare

Do School Counselors Need Their Own Insurance Policy?

Healthcare

5 Rewards of Being a Mental Health Technician

Home Health

What are Key Compliance Issues in Home Healthcare?

Home Health

The Home Hospital: What Is It and How Will It Affect Future Care?

Healthcare

What Challenges Should School Counselors Expect as Schools Reopen?

Pharmacy

Sharing the Workload: Questions You Can Ask Your Pharmacist Instead of Your Doctor

Healthcare

5 Situations Where Testing Labs May Be Legally at Risk

Healthcare

Do Marriage Counselors Need Professional Liability Insurance?

Healthcare

8 Malpractice Insurance Terms Every Medical Professional Should Know

Healthcare

Social Worker Insurance: Do I Need My Own Coverage?

Mental Health

Pandemic Pressures Drive Increased Need for Mental Health Technicians

Nurses

Celebrate National Student Nurse Day on May 8

Nurses

National Nurses Week: Celebrate May 6-12

Healthcare

Why Nursing Students Need their Own Professional Liability Policy

Home Health

How to Find Affordable Professional Liability Insurance for Home Health Providers

Healthcare

5 Benefits to a Career as a Pharmacy Technician

Healthcare

How Digital Pharmacies Will Change the Industry

Healthcare

How to Become A Pharmacy Technician

Healthcare

Supporting Providers in the Age of Telehealth

Healthcare

12 Keys to Finding the Best Physical Therapist Insurance

Healthcare

When Are Lab Technicians Liable? Five Reasons to Carry Professional Liability Insurance

Healthcare

What Is and Isn’t Covered by Malpractice Insurance?

Healthcare

Why COVID Testing Labs Should Carry General Liability Insurance

Healthcare

Do Occupational Therapists Need Malpractice Insurance?

Healthcare

Can Lab Technicians Be Sued for Malpractice?

Cyber

5 Reasons Cyber Security Insurance Is Becoming More Important Than Ever

Healthcare

What Sort of Insurance Will Cover Physical Therapists?

Cyber

Helping Hesitant Patients Embrace Telehealth

Cyber

Why COVID Testing Labs Should Have Cyber Security Insurance in Case of a Data Breach

Nurses

GI Nurses and Associates Week: Highlight A GI Nurse Hero March 21-27

Nurses

What Malpractice Risks Do GI Nurses Face?

Nurses

What Kind of Nurse Should You Be? Check Out the Growing Field of Gastroenterology

Healthcare

6 Risks Lab Technicians Face Without Professional Liability Insurance

Healthcare

Do Contact Tracers Need to Protect Themselves with Professional Liability Insurance?

Cyber

Telehealth Rules Relaxed During Pandemic

Cyber

Telehealth is More Than Just Video Appointments

Healthcare

Pharmacists: Which Specialty Is Right for You?

Healthcare

Sued for Malpractice: A Guide for Nurses and NPs

Healthcare

A Guide to Medical Director Insurance and the Costs

Healthcare

2021 Trends to Look for in Occupational Therapy

Healthcare

Become a COVID-19 Contact Tracer

Healthcare

How Much Does Physician Assistant Malpractice Insurance Cost?

Healthcare

Lab Technicians: Is a Travel Job Right for You?

Home Health

Why Your Agency Needs Home Healthcare Insurance

Lab Technician

Covering Covid-19: Is Your Medical Laboratory at Risk?

Healthcare

A Complete Guide to Insurance for Physical Therapists

Healthcare

The Costs of Medical Staffing Agency Insurance

Home Health

Why Start a Non-medical Home Care Business

Healthcare

IV Nurse Day: Celebrate Jan 25

Healthcare

How to Become an IV Nurse

Healthcare

Charting by Exception: Errors by Omission or The Efficient New Norm?

Healthcare

Are You a Culturally Competent Nurse?

Healthcare

Risks of Abbreviations in Nurse Charting

Home Health

A Guide to Starting a Home Healthcare Business

Nurses

Nurses and The Good Samaritan Law

Cyber

Cyber Liability and HIPAA Compliance

Cyber

Why Hackers Love Healthcare Data

Cyber

Ransomware Rampant in Among Small Businesses

Cyber

What is the cost of a data breach?

General

NOW Insurance closes $2.5 million seed round, enhances AI-enabled platform

Cyber

Cost of a HIPAA Violation

Cyber

How to Create a Small Business Cyber Security Plan

Cyber

Small Business and Cloud Storage: Is Your Data Secure?

Cyber

Social Engineering: 7 Common Red Flags

Event Planning

Getting Liability Insurance for Events

Event Planning

Starting an Event Planning Business: A to Z

Event Planning

How Much Does Event Planning Insurance Cost?

Event Planning

Insurance for Event Planners: What You Need to Know

Event Planning

What’s Included in Event Planning Insurance Coverage?

Insurance Basics

What Can a Tax Preparer Be Held Liable For?

Insurance Basics

Tax Preparer Insurance 101

Medical Staffing

4 Nurse Staffing Issues to Avoid

General

What You Need to Know to Be a Tax Preparer

Insurance Basics

Insurance for Bookkeepers: A Complete Guide

Medical Staffing

How to Start a Nurse Staffing Agency

Insurance Basics

What is Liability Insurance for Bookkeepers?

General

How to Build Customer Relations in Your Business

Medical Staffing

A Guide to Medical Staffing Insurance

General

Developing an Effective Risk Management Plan

Insurance Basics

All You Need to Know About Therapist Insurance

Mental Health

What is Malpractice Insurance for Counselors?

Mental Health

Benefits of Therapist Liability Insurance

Insurance Basics

What’s the Average Counselor Malpractice Insurance Cost?

Insurance Basics

Risk and Hazards of Being a Massage Therapist

Insurance Basics

Do Nutritionists Need Insurance?

Insurance Basics

What’s Included In Massage Insurance Coverage?

Insurance Basics

Everything You Need to Know About Malpractice Insurance Coverage For Nutritionists

Insurance Basics

Do Massage Centers Need Insurance?

Insurance Basics

How Much Does Nutritionist Insurance Cost?

Insurance Basics

Insurance Plans For Nutritionists: Everything You Need to Know

Insurance Basics

Massage Therapy Insurance: A Beginner’s Guide

General

Coronavirus Outbreak: 3 Tips to Keep Your Healthcare Business Safe

General

Company Working From Home? Stay Safe of Cyber Attacks

Insurance Basics

Business Interruption Insurance and Coronavirus

General

4 Best Practices for Medical Workers During the COVID-19 Outbreak

Insurance Basics

Inside the Hacker’s Mind – Social Engineering

Insurance Basics

Do Consultants Need Insurance?

Insurance Basics

Fitness Center & Gym Insurance: A Beginner’s Guide

General

Should Your Company Work From Home During the Coronavirus Outbreak

Insurance Basics

Why Your Business Needs Wellness and Fitness Insurance: A Comprehensive Guide

Insurance Basics

What Is the Cost of Gym Insurance?

Insurance Basics

What Insurance Do Consultants Need?

Consultants

How Much Is Insurance For a Consultant?

Consultants

Benefits of Consulting Insurance Coverage

Healthcare

Pay as You Go Insurance for Healthcare Professionals

General

You Have Your Physician Assistant’s License: Now What?

Healthcare

Why Are You Still Buying Occurrence Malpractice Coverage?

Healthcare

What Does Malpractice Insurance Cost?

General

Physician Assistant Malpractice Coverage: A Practical Guide

Nurses

Do Student Nurses Need Malpractice Insurance?

Nurses

Ouch, You Hurt Me! Do Nurse Practitioners Need Their Own Malpractice Policy?

Nurses

What Type of Insurance Do Nurses Need?

Insurance Basics

Understanding Insurance Terms: Back to Basics

General

What Does Professional Liability Insurance Cover?

General

Types of Insurance Available for Small Business Owners

General

Potential Small Business Risks

General

General Liability Insurance: How to Keep your Business Protected

General

Choosing a Business Insurance Provider: Everything You Need to Know

General

Business Insurance Plans – Do I Need One?

General

Benefits of Professional Liability Insurance

General

What Is the Average Cost of Errors and Omissions Insurance?

General

What Is Cyber Liability Insurance?

General

What Does Errors and Omissions Insurance Cover?

Cyber

Cyber Insurance 101: Why You Need It

Cyber

What Does a Cyber Liability Policy Cover?

General

Errors and Omissions Coverage: What Is It & How Does it Work?

Cyber

What Is the Average Cost of Cyber Liability Insurance?

General

Who Needs Errors and Omissions Coverage?