Many types of businesses may require Errors and Omissions (E&O) insurance coverage. Construction firms that have architects on staff may need coverage in case of oversight by the educated professionals they employ. Real estate brokerages, investment firms and a host of other businesses that rely on the intelligence and insight of professionals may benefit from carrying errors and omissions coverage. Companies that have internal databases with sensitive client information may need E&O coverage to protect them in the event of a data breach.
An E&O policy can limit a company’s losses in scenarios where clients or customers may take issue with the services provided by the company or experience setbacks because of company oversights. Leadership within an organization may find themselves fighting an uphill battle when trying to navigate a claim for E&O coverage.
What Does E&O Protection Cover?
E&O insurance can apply in a broad assortment of scenarios that involve a degree of professional negligence. The main use of E&O coverage is often to minimize the financial setbacks generated when a customer or client files a complaint. The policy can pay for legal representation during a dispute and can also cover the losses reported by the client or customer.
Coverage can help reimburse those who lose money due to negligent investment practices or who have to redo work on a property because of issues with the design proposed by an architect. Frequently, companies carry liberal amounts of E&O insurance to protect against claims made by disappointed clients and the impact those claims might have on business operations. Unfortunately, not all insurance companies quickly and amicably resolve claims related to professional negligence.
Litigation Sometimes Follows Low Offers
E&O coverage typically needs to be sufficient to reimburse clients for their losses while also covering any secondary expenses that the company incurs. Even when the policy itself may theoretically be valuable enough to cover those expenses, businesses may have a hard time securing adequate compensation from the insurance company.
In fact, the company may be so insistent about negotiating to limit costs that clients end up deciding to pursue lawsuits against the organization. Carrying adequate coverage is only the first step in protecting a company’s finances and reputation.
The organization may also need to be very assertive when a claim is necessary. Managing communication with the client or customer who points out professional failings and assertively negotiating with the insurance company are frequently necessary for a company to protect its finances and reputation.
Errors & Omissions claims can be complex and time-consuming, but you don’t have to handle them by yourself. Whether you need guidance in understanding your policy, estimating losses, or negotiating with your insurance company, expert support can make all the difference. Contact us today to ensure your E&O claim is managed effectively, protecting your company’s finances and reputation. Let us help you focus on what you do best—running your business—while we handle the details.