Errors & Omissions and Directors & Officers

It’s not about your professionalism, training, or years of experience. It’s about human nature. Mistakes - and even misplaced blame - happen to the best of us, no matter how experienced.

Errors & Omissions: the simplest clerical error or proofreading mistake (even one made by a trainee) can cost you, especially if it results in financial loss or damage to the reputation of one of your customers. Your business liability insurance protects your operation against bodily injury, property damage, or advertising injury.  But what happens when you, one of your employees, or even a vendor fails to catch something that your customer doesn’t miss, and they hold you responsible?

They can not only refuse to pay for service, they may also sue you for damages. With an errors and omissions (E&O) insurance policy, you’ll enjoy specialized liability protection against losses not covered by traditional business insurance.

Directors & Officers: serving a business entity, homeowners association or non-profit can be fulfilling, but it may also put your personal assets at risk.  Corporate directors and officers, and their spouses, can be sued by employees, vendors, competitors, investors, customers, or other parties, for actual or alleged wrongful acts in managing an organization.  Again, you may done nothing wrong, but others may want to assign blame for bad things that happen.

Being involved can create real risk.  With a directors and officers (D&O) insurance policy, both the the company and it's directors and officers are protected from legal fees, settlements, and other costs. It is the financial backing for a standard 'hold harmless' indemnification and most officers and directors want a company to provide both indemnification and D&O insurance.

• Doctors
• Lawyers
• Accountants
• Architects
• Engineers
• Wedding planners
• Printers
• Building-trades contractors
• Designers
• Advertising agencies
• Any 'service' provider

Every service business has E&O risk - if an error or delay may cost a client money or damage their reputation - and should investigate E&O insurance protection.

Errors and omissions insurance protects you from claims in the event a customer or client sues your service business for negligent acts, errors or omissions occurring during business activities, and which could potentially result in a financial loss for the client.  The policy usually covers the business owner, both salaried and hourly employees, and subcontractors working on behalf of the business.  You can often customize to meet specific needs, no matter what your business or industry. Real estate agents face different risks than printing companies, but both have potential to impact their customers' lives and livelihoods if a mistake occurs.  Benefits of a specialized E&O policy may also include:

• Monthly payment options to help spread out your payments, so you can better manage your cash flow
• Coverage of temporary staff, full-time employees, and independent contractors
• Past work, covering unforeseen claims, arising from work completed before you were even insured, to a pre-agreed date
• Worldwide coverage as long as the claim is filed in the U.S., one of its territories, or Canada
• Claims responsiveness when time is of the essence, especially in the event of a threat or lawsuit
• Coverage for contracts satisfying most standard contract insurance requirements
• Tailored coverage for the specific risks of your field and industry
• Knowledgeable agents who provide expertise and responsive service

Any organization with a corporate board or advisory committee should consider D&O insurance, including non-profits. Your company does not have to post revenues in the tens of millions of dollars for your directors and officers to be personally sued over their management of company affairs. In fact, smaller businesses with fewer assets may need the protection more than large, deep-pocketed corporations.

It’s a common misconception that D&O claims are mostly a public company phenomenon. In fact, a recent Towers Watson survey showed that public, private, and non-profit companies ALL face D&O litigation risks.

Directors and officers insurance protects both the organization and its officers and directors in the event an employee, customer, vendor, competitor, vendor or other third party sues the corporate board or advisory committee for mismanagement of corporate affairs.  Directors and officers are sued for a variety of reasons related to their company roles, including:

• Breach of fiduciary duty resulting in financial losses or bankruptcy
• Misrepresentation of company assets
• Misuse of company funds
• Fraud
• Failure to comply with workplace laws
• Theft of intellectual property and poaching of competitor’s customers
• Lack of corporate governance

While most insurance products are similar in price and function, insurance providers vary when it comes to structuring a policy tailored to you.

After all, there’s no such thing as a one-size-fits-all insurance policy when it comes to your business.

Contact us today, and we'll help you protect what matters most.