Who Needs Errors and Omissions Insurance?Posted on May 01, 2016
Errors and Omissions Insurance (E&O), often referred to as professional liability insurance (PLI) or professional indemnity insurance (PII) coverage, is vitally important for people in many different fields. Almost anyone who provides advice or a service as part of the daily job can benefit from this type of insurance coverage.
What does Errors and Omissions Coverage Provide?
One of the most important things E&O coverage offers is protection for businesses and professionals from the full cost of defending themselves against claims of negligence that result in lawsuits, as well as paying the damages that may be awarded in these instances.
It’s important to understand that you don’t have to be guilty of wrongdoing to be sued. We live in a society that is highly litigious and court costs alone can be astronomical. Your errors and omissions coverage protects you whether you are found guilty or not – saving you a great deal of money on your defense. If you are found guilty, and damages are awarded, it will save you even more money by assisting with the payment of those damages.
Are There Limits to the Benefits of E&O Coverage?
Policies vary from company to company and individual to individual. Your policy will have a limit. You will need to work with your insurance agent to determine how much coverage you need according to your field, your risks, and the potential damage awards that may be levied against you in those capacities.
In addition to the limits of an errors and omissions policy, though, there are certain exclusions to keep in mind. Below is a general list but certainly not an exhaustive list. Make sure you ask your agent about exclusions and how they may affect your coverage in the event of a lawsuit.
- Advice or services offered under the name of a business, charity, or organization that isn’t named in the policy.
- Acts that are criminal, illegal, malicious, or dishonest in nature.
- Intentional violation of state, local, or federal laws, regulations, statutes, or ordinances.
- Acts that infringe on copyrights, patents, or trademarks.
- Violation of securities acts.
- Acts that are illegally discriminatory.
There are many others. The key is in learning exactly what your policy covers and determining whether or not you may need supplemental coverage in other areas to fully protect your personal and business interests and assets.
Who Really Needs Errors and Omissions Protection?
The list of businesses and professionals who need the protection E&O coverage provides is a long one. It spans many industries including the following:
- Wedding planning professionals (everyone from bakers to photographers, to hair stylists, planners, and even dressmakers can be named in a lawsuit if something goes wrong on this important day).
- Advertising agencies (if an ad campaign goes wrong and paints the company in a negative light, it can be a nightmare for your business – even if the negativity is no fault of your own).
- Health and medical professionals (while everyone has heard of medical malpractice insurance, there are other fields in the healthcare industry such as dentistry and even veterinary medicine that need E&O coverage).
- Consultants (almost every industry has consultants – computer consultants, engineering consultants, even website design and SEO consultants and you need this important protection too).
These are just a few examples. There are many more professionals who need the protection that errors and omissions coverage provides. If you have questions about whether or not you need this coverage, call Otterstedt Insurance Agency for an honest assessment of your professional insurance needs and an overview of the coverage you already have.