An Errors & Omissions Insurance Policy (also known as E&O insurance) is a Professional Liability Insurance for professionals from any category that insures them from lawsuits that they face fur to a mistake they committed in their professional capacity.
Professionals like Lawyers, Doctors, Architects charge heavy fees to their clients and owe a duty of care towards their clients. Any negligence might result in errors which might lead to heavy financial losses for the clients. These clients might file a lawsuit against the professional in order to recoup their losses.
Such lawsuits are not only harmful for your business reputation but also involves expensive damages and settlements. An Errors & Omissions Insurance Policy will protect the Insured Party against such damages and losses by covering the Defence Costs and Settlement Expense.
What Does Errors & Omission Insurances Cover?
The claims that E&O insurance takes responsibility of protecting your business from are Negligence, Breach of Contract or Breach of Confidentiality, violation of a fair deal, errors in the service provided, failure to perform the desired level of services etc. While providing professional services directly to clients, there are high chances that the client might sue you if they feel the service provided is not up to the mark. If a situation like this occurs, an E&O Insurance Policy will cover:
- Defence Costs which can be very high
- Settlements that can cost you a lot,
- Legal Representation Expenses in respect of any inquiry initiated against the Insured Party
What E&O Insurance Does Not Cover?
Businesses should know that no matter even if they have the best Errors & Omissions Insurance Policy, the Policy will not cover every type of liability claim that the business faces like:
- Purposefully breaking a law or cheating the client,
- Any bodily injury or property damage that your business is responsible for,
- Work-related injuries or illness that your employees go through, that is covered by another kind of insurance.,
- Harassment or discrimination claims filed by your own employees.
Who needs to purchase an Errors & Omissions Insurance Policy?
Errors and Omissions Insurance is generally required by firms involved in providing professional services or advisory services.
Commonly Errors & Omissions Insurance or Professional Indemnity Insurance Policy is purchased by Chartered Accountants, Architects, Lawyers, Doctors, Technology Companies.
3 Benefits of Having an E&O Insurance
Regardless of how careful and responsible you are with your professional services and always check the process and communication related to the client properly, it is a good idea to purchase an E&O Insurance Policy for your business for several reasons such as:
- Security for your Business: Generally, professionals try to be as careful as they can be with the procedure, communication, documentation, etc. But it is quite common for any business to suffer a momentary lapse that can eventually result in a lawsuit. To protect your business from unwanted claims that can result in huge defence costs and court-awarded damages and settlements, it is a wise idea to secure your business with an Errors & Omissions Insurance.
- Protection from Inadvertent Mistakes: There are chances that clients may sue your business for errors that you have not even made or initiate legal action if the professional’s services are not as per expectations. An Errors & Omissions Policy coverage provides protection to the Insured from such claims of incomplete service or negligence where an actual error has not even occurred.
- Protection Of Assets: If a client sues the business and an adverse court ruling results in substantial damages which the company is unable to pay, then the owner might have to sell assets to pay the damages. An adequate E&O Insurance Policy cover will help in protection of assets by paying for the Defence Costs as well as the Compensatory Damages awarded by the court.
Qian is an experienced Insurance broker for Errors and Omissions Insurance in India. We have tie-ups with the top Insurance Companies. Our experts will make sure that you receive comprehensive cover by examining the company’s insuring clauses and exclusions in detail and also assist you with the Best Errors & Omissions Insurance Quotes.
If you are looking to purchase an Errors & Omissions you can reach out to us at support@qian.co.in or 022-22044989 or fill this Contact Form. We promise to respond within 24 hours.