No one is impervious to mistakes. Even the most experienced businesses can make them, and if it’s the job of those businesses to deal with demanding clients and substantial budgets, then they can be very costly for all parties involved.
That’s where errors and omissions insurance comes in. This is a type of insurance provided to companies that are always one mistake away from losing money for their clients and being forced to deal with the repercussions themselves. This insurance can be very costly to overlook as a mistake like that can end a business overnight. So, if you don’t have an errors and omissions insurance policy yet and would like to learn more about it, keep reading.
Errors and omissions insurance, which is also known simply as “E&O insurance”, is a form of liability insurance provided to companies that deal in services, products and/or advice. The goal of E&O insurance is to help these companies deal with the financial responsibility that occurs following a mistake and a resulting lawsuit.
As the name suggests, this insurance deals with liability lawsuits that result from an error of judgement or an omission. This insurance is also known as “professional liability insurance” and in some regions, and for certain professions, it is required by law.
Errors and omissions insurance is popular in high pressure professions, where mistakes are common. These mistakes aren’t always damaging and don’t always result in severe financial loss for the client, but they can do, and if the negligent party is not insured then the resulting lawsuit could cripple them financially.
E&O insurance provides cover against such eventualities, providing companies with a safety net of sorts in the event that a mistake is made and a client begins legal proceedings.
Errors and omissions insurance provides cover in the event of professional negligence. The exact cover will depend on a number of factors, including the policyholder’s profession, but the coverage is typically very wide and encompasses many things that could be classified as “errors”.
It does not, however, cover the cost of a criminal prosecution and is essentially void if the policyholder was found to be criminally negligent. It may also not cover certain aspects of cyber crime, including security breaches, even if the breach was the result of company negligence. However, this can be discussed with the insurance broker and if it is not included but is considered essential then another insurance policy can be arranged. These policies are offered by KASE Insurance, in addition to errors and omissions insurance policies and many other insurance types.
Anyone who deals with sensitive information on behalf of their clients may benefit from purchasing errors and omissions insurance, and the same goes for those who are in a high-risk field. Generally speaking, if a mistake on your part could result in great loss for your client, then there’s a good chance you need errors and omissions insurance.
There are a number of professions where errors and omissions insurance is considered essential. The most notable of these are doctors and dentists, whose negligence could impact the health of their client and lead to very expensive medical bills; and lawyers, who are always one mistake away from costing their clients greatly.
But it’s also something that is becoming popular in the PR and advertising sector, as well as printing and manufacturing. If a mistake is made during an advertisement campaign it could lead to an ineffective advert or even one that damages the client’s reputation; if a mistake is made in manufacturing it could result in a fortune being spent on a product that is ultimately not as required.
At KASE Insurance we provide some of the most comprehensive errors and omissions insurance in Toronto, providing assurance to businesses across the city. We always put customers first and are always looking to improve our offering and to adapt to the needs of our clients. This unique approach is why KASE is considered one of the best insurance brokers in Ontario.
Safeguard the future of your business today by contacting one of our representatives to talk about errors and omissions insurance.
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