Nobody enjoys having to pay for insurance, but when problems arise and you need it, a good policy is a great thing to have. Car insurance is a simple example. When driver A hits driver B due to negligence, driver A’s insurance has to pay for repairs and medical bills necessary. In business, liability gets a bit more complicated and abstract, but it’s no less necessary. One of the types of liability a company should have includes errors and omissions, or E & O insurance, which are liability insurance policies that help protect companies in two areas against the rising costs in a few areas:
- Court fees
- Legal fees
- Judgments for damages
Protecting a Business from Errors
People make mistakes. In business, as in regular life people make mistakes in contracts. Misunderstandings occur, and a key section of a contract may be incorrect. When the party paying for the contractual service loses money as a result, they may attempt to sue the contractor to reclaim monies lost. E & O insurance policies help hedge against the damage of such a suit.
Protecting a Business from Contract Omissions
If something seems to be left out of a contract or a business arrangement, the client may choose to file a lawsuit. E & O insurance can help mitigate costs incurred in those situations. Specialists will examine details of errors and omissions policies to make sure that a business is covered in all of the possible situations the business might encounter.