Are you wondering whether you, as a consummate professional in your business who knows your stuff, really need coverage known as E and O insurance when mistakes and negligence are not in your repertoire? Ask experienced business people, and they may respond with a resounding yes—because these days, lawsuits are bound to occur regardless of whether the claim of professional liability is groundless or not. Sometimes a client sues you if he or she isn’t pleased with the ultimate outcome of a project, even if you offered period updates, received input from the client along the way, and appeared to be on the same page the whole way through. It’s an ugly surprise but it can happen.
Policy pays for defense costs and more
Fortunately, this policy pays for the legal costs to defend you in the event you are hit with a lawsuit, regardless of whether the court finds for the plaintiff or for you, the defendant. The policy also covers the claims and damage award (up to the stated policy limitations) in the event the judgment goes against you. You may be thinking that your general liability coverage already protects you in these instances, but think again. In fact, professional liability claims are not included in the standard general liability policy; they are not within the policy definitions of bodily injury or property damage.
Is the customer always right?
Let’s face it: sometimes clients have a legitimate concern. Other times they may be irrational or even just looking for a payday. Whatever their motives, it’s important to be prepared to protect yourself. Determining your need for an E&O policy is best accomplished with the help of a professional insurance agent, who can not only analyze risk but provide guidance on the appropriate coverage amounts for this and other types of protection. Contact an agent today to learn more.