The coverage focuses on the professional’s alleged failure to perform, financial loss it may have caused, or an error or omission in the services sold.
Unfortunately some professional business owners say, “I’ve been in business for 30 years and have never had a claim,” or “I don’t make mistakes. That doesn’t mean that they don’t need E&O coverage. Or, that they never make a mistake.
Even a groundless accusation needs to be defended and will incur out of pocket expenses.
While a business owner may have made it through many years of business with no claims, that doesn’t mean that they might not make a mistake in the future that could cause a claim. Even if that claim is not true, they may have to defend themselves for a false accusation.
If you are in the business of providing services to others for a fee, you have an E&O exposure and would benefit from the coverage. E&O coverage protect you against claims of negligence even if you have not made a mistake.
Here are some claims examples:
An interior designer is hired to order specific furniture for their client. But, the client keeps making numerous changes to what they want. When the furniture is ordered, the designer makes an error and orders the wrong furniture – and it cannot be returned. All of the furniture will need to be replaced.
An IT consultant is hired to review a website to make updates and implement new security measures to correct its weaknesses. A month later, the client’s website is hacked. The consultant’s client loses a substantial amount of revenue from the site being down. They accuse the consultant not catching all of the weaknesses and damaging the business.
Anyone providing services to others for a fee has a professional exposure and should carry E&O insurance.
At Fox Point Programs, we have the ability to help you on almost any type of risk that you may come across with a professional liability exposure.
The financial impact on an E&O suit on a company can be devastating and can potentially wipe out corporate and personal assets.
Get a quote to learn how affordable it is to protect your professional services firm with E&O coverage.
