As a business owner, you are responsible for your products and services. If something goes wrong, then your customers can hold you liable. So, this is where errors and omissions insurance (E&O) comes in.
E&O insurance protects businesses from the financial burden of lawsuits alleging errors, omissions, or negligent actions.
It covers legal expenses, or settlements, and judgments, up to the policy limit. Whether you need errors and omissions insurance depends on your business type and the level of risk you’re comfortable with.
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Types of Businesses That Need E&O Insurance
Errors and omissions insurance recommends for businesses and that provide professional advice or services to clients at a fee.
If you give advice or render a professional service that affects your client’s business financially, then they have the right to sue you for damages.
Businesses that need E&O insurance include:
Consultants
Management, IT or marketing, and financial consultants are examples of consultancies needing E&O insurance.
In this line of service, you can make an error that affects your client’s business. If you give your clients advice, so that causes them to lose money, they may be able to sue you for damages.
Architects and Engineers
These professions are exposed to litigation risks due to the possibility of faulty designs and miscalculations.
If your design is responsible for property damage, personal injury, or economic loss, therefore your client can sue you for damages.
E&O insurance protects you from the legal and financial burden of defending yourself in court.
Accountants and Tax Preparers
If you make an error in your client’s tax returns, and your client suffers a financial loss. They are entitled to sue you for the damages.
E&O insurance can protect you from such a lawsuit’s legal and financial implications.
Insurance Agents and Brokers
As an insurance professional, you need to thoroughly understand the products you sell and your clients’ needs.
If you make a mistake in your client’s coverage and they suffer a financial loss so, you’ll be sued. E&O insurance helps you avoid those repercussions.
Attorneys
Attorneys are expected to provide sound legal advice and represent their clients to the best of their ability.
If you make a mistake, such as missing a filing deadline, and misreading a law, or giving bad advice, then your client can sue you for malpractice.
E&O insurance helps cover the cost of defending yourself in court and any damages you may be ordered to pay.
Restaurant and Bar Owners
Restaurants and bars are held liable for the health and safety of their patrons. If a customer becomes ill after eating or drinking at your establishment, then they can sue you for damages. Therefore, E&O insurance can cover the court costs and help you avoid large settlements.
Medical Professionals
Doctors, dentists, and other medical professionals must adhere to a strict standard of care.
If you deviate from this standard and your patient is harmed so, they can sue you for medical malpractice. Protect your business with E&O insurance if you are ever faced with such a lawsuit.
You need to consider getting E&O insurance if you have a client-facing business. Clients always sue businesses for errors and omissions, whether you made a mistake or not.
Even if you’re confident that you’ll win a lawsuit, then the process of defending is time-consuming and expensive.
What Does Errors and Omissions Insurance Cover?
E&O insurance is a type of professional liability insurance. It helps to protect businesses from the financial costs of litigation resulting from errors and omissions in their product or service. So, this includes allegations of:
- Professional negligence
- Breach of contract
- Wrongful advertising or marketing practices
- Violation of good faith and fair dealing
- Improper advice
- Inaccurate data
- Warranty errors
- Intellectual property infringement
- Mistakes and omissions
If anyone sues you for these reasons, E&O insurance helps cover the costs of your legal defense and settlement. So, It helps pay for the cost of investigating the allegations.
Get Error and Omission Insurance to Protect Your Business
E&O insurance is a beneficial part of running a client-facing business. If you’re sued for errors or omissions, it helps pay for your legal defense and any settlement you owe. Get errors and omissions insurance to secure your business from the financial costs of litigation.
FAQ
What is Notary Errors and Omissions Insurance?
NNA Notary Errors and Omissions (E&O) Insurance is liability coverage designed to protect your personal and professional assets in the event you make a mistake during the notarial process that causes your client to suffer financial loss.
Why should I have Errors and Omissions Insurance?
Errors and Omissions Insurance protects you against mistakes that can happen with any notarization.
Althought, Errors and Omissions Insurance you against mistakes that can happen with any notarization.
It only takes one of those mistakes to potentially lose your savings account, your home, maybe even your business!
Protecting yourself and your assets is very affordable. Enjoy peace of mind while on the job…activate your Notary Errors and Omissions Insurance policy now. Protect yourself against liability for just pennies a day.
I have a Notary Bond. Doesn’t that protect me?
No. It is a common misunderstanding that a state-required Notary bond protects Notaries. It does not. The Notary bond protects the public.
If the surety company makes a payment on your claim, you are required to pay them back.
The NNA’s Notary Error and Omission Insurance pays your claim and legal expenses up to your policy limit — you don’t have to pay a deductible. Plus, it provides you with expert legal defense at no extra cost.
Is Errors and Omissions Insurance required by law?
No, it’s not, but why not reduce your risk and avoid the financial loss of a potential lawsuit? It’s protection and peace of mind for YOU.
Your car insurance provides you with protection, too. Whether or not it is required by law is secondary to your protection.
Can a Notary be held personally and financially responsible for their notarial acts?
Yes. Notaries can held personally liable for the full amount of damages and caused by any misconduct in performing a notarization.
What about my employer? Don’t they cover me for this?
The Notary commission is yours, not your employer’s. Just as you are responsible for your seal and journal, you are responsible for your notarial acts.
Even if your employer carries business liability insurance, and that insurance may not protect you from liability for your notarial acts.