People are responsible for their actions in their job while interacting with their clients. This means that even a simple mistake, misunderstanding or dispute with a potential client can lead to charges of negligence and expensive legal action. If a claim is made, the professional has to bear the costs of defending the claim. It either ends up by hiring a lawyer or in worst cases ends up paying the compensation costs.
Errors and Omissions insurance is designed for protecting professionals against these risks. The various insurance service providers provide E&O insurance plans. Click to read more about E&O insurance providers.
Image Source: Google
Professional Liability Insurance or E & O insurance, covers the financial consequences that have arisen because of the neglect and wrong deed of the professionals with their work. It protects against the claims that often arise from disputes originating from confused communication between professionals and clients, or the perception that professional over-promised.
E & O insurance has access to lawyers who specializes in professional liability litigation and negligence lawsuits. It is beneficial for professionals that do not have much money to spend on hiring expensive lawyers.
Many professionals seek the protection afforded by forming a Limited Liability Company (LLC) – but companies still need protection against negligence claims from clients. Errors and Omissions insurance will help protect the assets of the company and if it does not have the assets, this policy will also protect the personal assets of directors or officers.
Errors and Omissions insurance policy helps to minimize the disruption caused by the lawsuit and protect the reputation and business finances.