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Commonly known as Errors & Omissions (E&O)


Professional liability Insurance is often called Errors and Omissions coverage, or E&O. The point of it is to protect your business from legal consequences when an employee makes a mistake that causes a customer to lose money. This type of insurance is crucial, especially if you offer a service, because it can keep you from losing your business when a customer brings a lawsuit against you.

The reason you need this coverage when you offer a service is that you never know when an employee will make a mistake. In fact, it's bound to happen. In addition, even when your employees provide excellent service, customers might still claim they have been negatively affected by your company. Though you might win the lawsuit if the customer cannot provide proof of wrongdoing, you will still have to pay for your legal defense, and professional liability insurance can help with this.

You can choose how much coverage you need. In most cases, you can get it in increments of $1 million. You can expect your deductible to be anywhere from $1000 to more than $20,000, which is likely less than any legal expenses you will face during a lawsuit.

Coverage Conditions And Limitations

When you obtain professional liability insurance, you need to make sure the policy covers certain errors and omissions that might be made by your staff. The issues that it will cover depend on your specific industry. You also need to make sure the policy is active at the time that you are accused of wrongdoing by a customer. Since you never know when a customer will decide to file a lawsuit against you, it's important to keep this coverage in place the entire time you are in business.

Claims That Are Not Covered

If it is found that you or your employees purposely caused a loss to a customer, the claim will not be covered by professional liability Insurance. The same goes if it is discovered that you breached a contract. This is why creating a contract and having each customer sign it is a good idea when you offer services.

How To Avoid Problems

If you want to avoid being sued for any kind of error or omission within your business, you should do your best to stay on good terms with the people you serve. This can reduce the chance of a customer suing you simply for being offended by your employees. Of course, even when you make an effort to keep your customers satisfied, there is a chance they will claim you have made a mistake that cost them money, and that's where professional liability Insurance comes in.

Even if you win a case, you still have to spend time and money fighting the lawsuit. This could also create a public relations problem when your customers find out you are being sued. That's why having professional liability Insurance is important, since it enables you to settle the case quickly and without spending all of your own money.

Prior to getting a professional liability Insurance policy, you should write down all of the types of issues you might encounter that can cause you to be sued. Then you can talk to an insurance agent about obtaining a policy that perfectly suits your business.

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Fax:  (702) 977-7269


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Suite C

Las Vegas, NV 89146


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