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Errors & omissions (E&O) insurance is a type of liability insurance that protects businesses from claims related to professional mistakes. Inadequate or incomplete work, poor advice, delayed delivery of products or services and other negligent actions all constitute examples of “errors and omissions.” Lawsuits brought over these types of mistakes can be very costly for nearly any organization; fortunately, E&O insurance provides assistance in these situations. So, how much does errors and omissions insurance cost?

The current business world operates at an incredibly fast pace, and this means that occasionally, companies make mistakes. This is especially true of industries such as law and pharmaceuticals that often involve complex concepts and sophisticated jargon. Companies in all industries can gain from this insurance, but especially those in high risk industries. One seemingly small clerical error may have potentially severe consequences and be quite costly. For situations such as these, errors and omissions (E&O) insurance can be extremely beneficial. So, what does errors and omissions insurance cover?

In some industries, mistakes can become costly rather quickly. Errors & Omissions (E&O) insurance provides coverage for businesses that may be sued by clients because of their mistakes. Lawsuits against a business can often lead to a company spending large sums of money to dispute legal claims while also sustaining damage to its reputation.

In today’s world, businesses, both large and small, face a series of challenges that companies in previous decades did not. One of these challenges relates to the fact that now, businesses often undergo greater scrutiny over their manufacturing methods and the quality of their products. This is due, in part, to the introduction and implementation of new laws, regulations and requirements and the increasing frequency of lawsuits and other legal disputes with consumers. The Consumer Product Safety Improvement Act of 2008 and the Food Modernization Act of 2011 are two examples of laws created to regulate product safety.

Employees make mistakes, and while some of these errors are relatively minor, other ones can be egregious and extremely costly. Occasionally, companies are forced to carry out product recalls in order to rectify certain mistakes. Essentially, a recall is a request to return or replace a product that a manufacturer or another group has deemed defective or dangerous. According to Statista, there were 4,217 product recalls issued by federal agencies in the United States in 2015. That year, the Food and Drug Administration (FDA) also issued 2,789 recalls.

Business insurance protects small businesses from the potential financial damages that could arise from property damage, accidents, workers compensation claims, professional errors and other situations occurring during normal business operations. The correct coverage works to minimize the significant impact that a claim can have on small businesses.

Business insurance protects businesses from losses that may occur during normal operations. Accidents, lawsuits, and even bodily injuries can cause a business to fail if it does not have the proper coverage. While there is no single policy that protects against all risks, business insurance includes numerous policies that provide a wide range of protections. Some of these policies include general liability, employment practices liability, directors & officers, commercial umbrella and errors & omissions insurance.

According to a Clark School study published by the University of Maryland, there is a hacker attack every 39 seconds. When these attacks affect businesses, there are often strong reputational and financial consequences. Businesses in all industries face certain cyber liability issues that put them at risk for lost income and possible lawsuits.

Serving on the board of directors or as an officer transfers risks less common in other occupations. Directors and officers (D&O) insurance provides coverage for individual company directors and officers, as well as the business, against personal losses in the event of being sued.

Employers liability insurance protects employers from the possibly significant financial losses that occur when an employee sues over a job-related illness or accident not covered by workers’ compensation.