Accusations of negligence, misrepresentation, or purposeful omission can harm the reputation of a business and cause an immense financial loss in the wake of costly legal battles. Errors and Omissions (E&O) insurance is a necessary safety net for any business that provides clients with a service. Source: https://www.transparityinsurance.com/
In the face of e&o claims, insurance can provide coverage for issues such as
- libel or slander,
- copyright infringement,
- negligence (actual or alleged), and
- defense costs.
E&O claims are not often protected under general insurance policies which is why it is important to research and invest in E&O insurance.
Who Needs E&O Insurance?
Professionals of specific skills are held to a certain standard of care within their industry. Real estate agents are a good example because a customer may find issues with a building after the sale has been finalized. E&O insurance protects the real estate agent from having to pay out of pocket and deal with the high costs of hiring an attorney.
Some states and professions require proof of E&O insurance by law. An individual must present this proof before they can begin working in those particular positions. Even where it is not required by law, it is highly recommended for any business that provides a service or some type of advice to clients.