E&O Insurance: Good News & Bad News
It’s a good news, bad news situation. The bad news: lawsuits, once a measure of last resort, are now commonplace in settling disputes. The good news? You can protect yourself, your business and reputation, by investing in professional liability coverage, also known as Errors and Omissions (E&O) insurance.
Because computers and software are becoming progressively more intricate, the risk of something going wrong is growing exponentially. When it does, the consequences for the vendor are potentially catastrophic. The cost of defense, as well as potential damages due to non-performance, negligence, deception, slander, libel, breach of contract or underwriting has grown drastically in recent years. In response to this, several insurance companies have designed an E&O policy to protect software developers and other tech companies against claims.
Who Needs E&O Coverage?
The coverage is appropriate for anyone who gives advice on technology, makes educated recommendations in software, designs solutions or represents the needs of others. Service professionals, such as computer consultants, software developers, planners, etc. are prime candidates for carrying E&O insurance.
E&O Policy Overview
E&O coverage kicks in where your commercial general liability policy doesn’t provide coverage, such as for service errors, contract performance disputes or any other professional liability issues. These policies also include defense costs, which can be quite substantial even if liability isn’t found. Policies typically don’t provide coverage for non-financial losses or for intentional or dishonest acts.
To be eligible for this specialized insurance, candidates normally need proof of licensure in their “covered class of business.”
Count on the Experts
There are many different forms of professional liability insurance and multiple factors to consider when purchasing E&O coverage for your business. Chat with an ‘A’ Team member to ensure you make the right decision for your business.
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