3 Things to Know About Your Errors & Omissions Policy
“Oh no! You did it exactly like I told you to!” I noticed this sign on my uncle’s office door one day, and all I could do was smile. Partly because it was a joke, of course, but also because humans are prone to make mistakes! At times, it can be comical to watch someone struggle through a missed step, like when watching America’s Funniest Home Videos. However, for others, it can cause chaos and severe harm. If this happens in your business, would you know what insurance policy to turn to for coverage? If the resulting damage from a professional decision you made caused monetary harm and not physical harm, chances are your general liability may not cover it. This is where your errors and omissions coverage would step in to save the day. Here are 3 key things to know about errors and omissions policies.
1. They help cover things you shouldn’t have done
You’re a high-level business consultant and travel around the country working with fortune 500 companies to develop strategies to outperform the competition. You’ve just come up with the next greatest innovation on how to reach the desired target demographic, and you know it will work. After drafting the perfect email, which spells out exactly how to crush the competition, you hit send, only to realize you sent it to your client’s largest competitor who you worked for last year! As a result, your client loses $500,000. Your errors and omissions coverage should protect you when you’re sued for this mistake.
2. They help cover you when you didn’t do something you should have done
You’re a brilliant lawyer, working for one of the largest law firms in the state. You’ve just landed the biggest client of your career, and it seems to be a slam dunk. All you have to do is file the appropriate motion with the court before the deadline, no sweat. The deadline comes and goes, and then a week later you realize, you never turned in the paperwork! Your client finds out and realized they may now lose the case because of this mistake. Your errors and omissions policy should protect you when you’re sued.
3. They help if you perform certain types of work incorrectly
You’re a new electrician. You’ve been hired by a large security firm around your area to wire their new showroom. When they have their first exhibition showing off their new products. the wiring to their more exciting product doesn’t work correctly, making the device look like a failure. This results in the security firm losing thousands of dollars in sales. Since the damage was monetary, and not physical, errors and omissions should pick this up. If the wiring shorted, causing a fire and physical damage, your general liability insurance should cover you.
Errors and omissions coverage can help prevent a major loss. Even in instances where your troublesome employee finally completed a job just like you told them to and caused a major mistake.
If you’re not sure you have the right type of coverage for your business, give me a call at Capitol Insurance!