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Despite good intentions, anyone who’s in business can make a professional error at some point. Also, companies may have to deal with customer dissatisfaction. Professional liability insurance, or errors and omissions insurance, covers companies and professionals against financial losses caused by an error or omission, resulting in injury to a third party. With this type of insurance, a fault is covered, regardless of whether or not it was intentional and whether it was committed by a company executive or an employee. This protection is not included under general liability insurance, so it’s important to subscribe this additional guarantee to ensure your company is well protected.
To discuss the risks associated with your profession or industry, contact your Ultima broker.
Which companies should think about getting errors and omissions insurance?
- Individuals or companies governed by a professional association
- Independent managers or companies offering consulting services
- General and specialized building contractors
- Companies offering financial services (accounting, investment, etc.)
- Health care professionals (doctors, therapists, etc.)
- Companies in IT and new technologies (programmers, web agencies, etc.)
What are the most common forms of errors and omissions?
Most frequently, lawsuits arise from customers who are dissatisfied with a service they have received.
What does errors and omissions insurance typically cover?
Your insurer will pay all the costs of your legal defense, regardless of whether the accusation is justified or unfounded. The insurer will also cover expenses for damages and interest.
Liability prevention tips for businesses
- Give customers a detailed description of the services offered and their scope
- Include limitation of liability clauses in service contracts
- Establish good internal procedures in writing and communicate these procedures to all stakeholders
- Get your customer’s signature confirming their satisfaction with the proposals or product samples you present
Don’t put your business at risk: contact your Ultima broker.