E&O coverage, also known as errors and omissions, professional liability or malpractice insurance, is used to protect a business in the event that a client sues them for lost wages or costly mistakes due to negligence or incomplete/inadequate work. There are many businesses that could benefit from getting this type of insurance, because it not only protects them but it also makes sure that they can effectively handle problems in a way that allows the clients to walk away happy, as well. Here are some potential benefits.
What is probably most important to you as a business owner is that your business and employees are protected in case someone decides to sue. Whether or not the client is right to sue, and whether or not they win the case, it can be severely detrimental to a business to have to pay for court costs. Paying these costs out of pocket could potentially ruin a business or at least result in having to make some changes such as cutting back on staff, causing a loss of jobs.
Another way that E&O coverage can benefit everyone is in the ways that it benefits your clients. If you don’t have the money to pay them what they are owed when they win a case, that can be bad for them as well. However, with coverage, you can make sure that your clients get paid in the event of a lawsuit.