As humans, we all make mistakes. And as a business owner, you need to be aware that mistakes can (and will) happen with the services you provide to your clients from time to time.  There are risks even working with the best, most experience employees.  And unfortunately, by providing a service that other individuals or businesses are counting on to be completed correctly, even the smallest mistake can end up costing you and your business big. Preventing this type of financial liability is where Errors and Omissions (E & O) Insurance comes in.

E & O Insurance is a type of insurance coverage that protects your company (and you as the business owner) if an error or omission was made in the service you provide and your client/customer is holding you responsible. It is the coverage that comes into play if an error or omission creates a financial loss on your client’s end and they are going after you for the amount of monetary damages.

Consider all the services your business provides to its clients, and all the possible errors that could happen with those services. For example: What could be the financial damages be if a task/project was not completed on time or if it was done incorrectly for a client? The client could lose business on their end directly from that mistake, but also indirectly by losing future potential clients because their reputation has been tarnished by your business’s mistake.  These damages could all fall on your shoulders if you aren’t covered by E & O.

E & O coverage even extends to cases where you are not at fault. Attorney, legal and court fees that accumulate during a litigation are all covered through E & O insurance even when it’s decided that you are not at fault.  If you are at fault, these charges, as well as any others brought against you for the damages, are covered by this insurance.

Needless to say, there is a very large risk to your business financially if you do not have E & O coverage simply because mistakes do happen. Plus, general liability insurance does not include this type of coverage.  Therefore, if this is not something that’s part of your business’s insurance portfolio now, it’s something to put into place as soon as you can. For more information, please contact Robert at Sargeant Insurance Agency, LLC at or 818-561-2600.