Errors and Omissions Insurance
Errors and Omissions insurance covers you for damages arising out of your alleged negligence, errors or failure to take appropriate action during the operation of your business or professional duties.
Despite your hard work and best efforts, a dissatisfied client may sue you and allege that you made mistakes. Frequently, a subcontractor you hired can cause the errors. These mistakes can result in significant financial loss to your customer or other third parties. Errors and Omissions insurance can provide protection.
In today’s business environment, companies that provide services or products to third parties need Errors and Omissions insurance protection in addition to their general liability policies. Without Errors and Omissions insurance, losses not covered by standard liability policies can be very detrimental to your business.
Errors and Omissions insurance delivers crucial protection to your assets when general liability insurance does not. O’Kane & Tegay can assist you with finding an appropriate Errors and Omissions insurance policy that picks up where the general liability insurance leaves off. With Errors and Omissions coverage, you will be protected against claims of financial harm that allege you failed to perform certain services or that your product failed. Errors and Omissions insurance will pay the monetary damages in such cases and the expenses incurred to defend your business.
Companies that should consider carrying an Errors and Omissions insurance policy include those that:
- Assemble, manufacture or install to customer instructions.
- Provide design work.
- Provide services, instruction or advice to third parties for a fee.
- Select raw materials for others.
- Subcontract work.
Features of Errors and Omissions insurance includes:
- Protection against claims caused by wrongful acts by or on behalf of the policyholder.
- A broad definition of your business’s product to include products or goods that you sell, manufacture, distribute or handle. Protection can be beyond a specific industry segment.
- A broad definition of your business’s service, which will deliver protection for services beyond the normal scope of business activities. This can include activities related to staffing, consulting, training and other support services.
- Depending upon the Errors and Omissions policy, coverage can extend to anywhere worldwide, including lawsuits that originate outside the United States.
Why Would a Company Need Errors and Omissions Insurance?
Consider these two scenarios.
- A tool and die manufacturer created a custom mold to make an engine part. However, the mold missed several specifications. As a result, the client experienced significant delay in manufacturing the engine part and lost considerable revenue. The client sued the tool and die manufacturer for expenses and lost revenue. The tool and die manufacture had no Errors and Omissions insurance and paid out of pocket.
- A printing business printed and packaged children’s toys for a client. The adhesive designed to seal the packaging failed, and the product fell out during shipment. The client sued the printing business for damages exceeding $250,000 in lost revenue and expenses. Without Errors and Omissions insurance, the printing business covered the loss directly.
Learn more about your Errors and Omissions Insurance Coverage options.
Call now to speak with one of the friendly agents in our San Francisco office, at 415-242-8777.
We will review your current coverage free of charge, discuss your current risks and search for the best insurance products to fit your business.
Request a Quote by filling out an application.