Errors and Omissions – What it Means for Your Small Business in 2022
Does your business provide professional advice and service? If yes, then errors and omissions insurance is still as important as ever.
What is errors and omissions insurance? Simply put, it’s professional liability insurance that aims to protect the business against client claims. Otherwise called E&O insurance, this policy covers the legal and settlement costs for lawsuits related to your business services.
What does it cover?
Mistakes happen in businesses, no matter what industry you’re in. Because mistakes happen, getting the right insurance service to protect you from them is crucial. E&O insurance also covers misrepresentation, negligence, inaccurate advice, and violation of good faith/fair service.
While all states don’t necessarily require businesses to get errors and omissions insurance, it’s still an excellent way to ensure that you’re not paying claims from your pocket. If the claim is proven true, the insurance company will pay the settlement and other covered costs for you.
It doesn’t only protect you financially, but it protects your employees too. Lawsuits can ruin your business. There’s the cost of court fees, the time wasted, and the potential loss of reputation that you have built for years.
What it does not cover?
Things not covered by errors and omissions insurance are the following:
- Patents and trade secrets
- Work-related illnesses and injuries
- Illegal acts
- Data leaks
- Employment practices
- Discrimination/harassment claims from employees
With errors and omissions insurance, the coverage should be in place before the claim is made in order for your insurance company to cover the cost. If the coverage lapses, your business will no longer be protected.
Cost of Errors and Ommissions Insurance
The cost varies depending on your chosen provider. Some insurance policies start from $250 annually. The cost can increase based on your business situation and the number of your employees. The higher the risk and the more employees you have, the bigger your annual cost will be. Other factors that impact the annual cost are your type of business, location, and claims history. Small business owners usually pay between $500 to $1,000 annually for their errors and omissions insurance policy.
There are ways to save money on your E&O insurance policy. You can pay for your entire premium yearly instead of paying for it on a monthly billing cycle. Some insurers provide discounts to businesses that pay an annual premium. It’s also important to ensure that your policy is active when the claim is filed and the mistake supposedly happened.
London Insurance Agency | Insurance Provider in London, Kentucky
London Insurance Agency is an insurance provider that aims to protect your business against professional negligence claims. The cases can last for years and the cost of damages can impact your business for the worse. With us, you are in good hands. We will evaluate your insurance protection and ensure that you have the right policy at the right price.
Call us for a free quote or a review of your policy today.
