Across every business and every industry, all entrepreneurs have something in common: We’re human. We err. We err personally, and we err professionally.
The former is complicated enough; the latter brings the possibility of a lawsuit.
As diligent a professional as we all might be, we have to accept that oversights and unintended mistakes can happen, and that we need to protect ourselves against that possibility. That means Errors and Omissions Insurance.
You’ve probably seen E&O insurance before
If you’re not familiar with the term, you’re probably familiar with the Errors and Omissions Insurance concept — think about how malpractice insurance works for medical professionals. Errors and Omissions Insurance plays the same role, across just about every imaginable industry.
These policies are designed to cover legal costs — from defense to settlements — if a client or customer sued, claiming your error or omission caused damage, financial or otherwise.
Does your company need E&O insurance?
The quick answer is probably.
If you provide a service that you’re paid for, the likelihood that you have some exposure to errors or omissions is high. That can be obvious — say, you’re a wedding photographer, and you accidentally drop memory cards with a client’s photos in a lake. It can also be more foggy — you’re a Nashville artist manager, and a client believes you acted in a way that sunk a deal.
Think of it this way: If you made a mistake — fell short on a project, blew a deadline — could a client or customer argue that it caused them financial/reputational harm? You’re a good candidate for E&O insurance.
A few of the professionals who routinely (and smartly) seek E&O insurance:
and lots of others
Take me, for example. I’m an independent insurance agent in Nashville, and I’m tasked with providing services and guidance to my clients. To protect my day-to-day tools and guard against liability, I carry a businessowners insurance policy. Since I’m providing advice and facilitating policies, I also carry E&O insurance.
Errors and Omissions Insurance is, by necessity, specific. Your policy needs to be (and will be) focused on the pitfalls you might be exposed to in your line of work, i.e. an E&O insurance policy for a mom-and-pop printing company will be vastly different from one for a personal trainer, or an agent like me.
If you have questions about what a policy specific to your industry would look like, reach out. I’d be glad to give you more specifics.
Valid or not, lawsuits can be expensive
Another important thing to note: Yes, we all err, but there’s also the possibility of a lawsuit being brought against you/your business for something that wasn’t your fault.
A lawsuit without merit isn’t a lawsuit without cost — more than a few small businesses without E&O insurance have been sunk by groundless legal claims. Your policy makes sure you have protection against issues that might arise, valid or not.
Have more questions? Happy to help. Call or email Tucker Coverage, and let me know what you need.
Another easy option: Fill out this form to get started on an online quote for whatever small business insurance needs you might have.
Other insurance-related subjects you’d like to see me take on here on the blog? Let me know — I’m always happy to get feedback.