Owner's Protective Errors and Omissions Insurance Coverage
There may be times when professional negligence or error on part of a company may lead to financial or reputational loss to the client. The company, in such conditions, may be liable to legally pay for the losses the client has suffered. The losses may be enormous and could put the company in a tight financial spot. This is when Errors & Omissions insurance coverage for owners, business owners, or project owners may come to the rescue.
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Get ₹1 Crore insurance cover starting at ₹35,000/year+
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Owner's Protective Errors and Omissions Insurance Coverage
Error and Omission Insurance
Errors and Omissions insurance (E&O insurance), also known as professional liability insurance, is a type of business insurance designed specifically to protect the business owner and their employees against the client's claims of error, omission, inadequate or negligence of work. If a client claims for any of these, the costs of defending the business against lawsuits by disgruntled clients can be enormous. This insurance financially helps the owners to pay for compensation arising from lawsuits by third parties, and defense costs.
Errors & Omissions Insurance Coverage for Owners
Mistakes can happen in every business. When these mistakes are big enough to create a strong negative impact on your client, there are chances your client may sue your business. Errors & Omissions insurance coverage for owners of businesses may include:
Work mistakes, Errors and Oversights
Even a small professional negligence or error can put your client in a fix. And when there is no other way, you can fix this, the client may try and recoup his losses by suing your business. This is when errors & omissions insurance policy can help business owners cover the legal costs.
Undelivered Services or Missed Deadlines
If your business is unable to deliver promised services within the timelines, it can disturb your client’s business plan, resulting in a loss of revenue for the client. In such a situation, the client may sue your business over missed deadlines and undelivered services. E&O insurance can thus cover the cost of the lawsuit.
Accusation of Negligence
Errors & Omissions insurance coverage for owners also takes care in case of accusation of negligence. If your business is unable to meet the promised standard or minimum industry standards, the dissatisfied client might charge your business for negligence.
Violation of Good Faith and Fair Dealing
We two parties start working together, both aim to work towards a similar cause with utmost good faith while achieving their objectives. While in the course of this business relationship, if for any reason the client accuses your business of violation of good faith and fair dealing, this insurance can provide coverage for the same.Â
False or Inaccurate Advice
Similar to the accusation of negligence, if your business has been accused of indulging in giving false or inaccurate advice to the client, you might face harsh consequences. If the client has suffered monetary losses or damaged his reputation, the client may drag you to court. Errors & omissions insurance policy, in this case, can cover legal expenses.
Conclusion
Errors & Omissions insurance coverage for owners goes beyond general liability insurance. This insurance type might not be mandatory by the law, nor does every client require you to have E&O insurance in place, but its importance cannot be stressed enough. Purchasing this insurance is a wise business decision as it may help protect your company in case of a liability claim.
Disclaimer: Above mentioned insurers are arranged in alphabetical order. Policybazaar.com does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
+Premium varies on the basis of Occupancy, Business Activity & Coverage Type
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