What is Errors & Omissions Insurance ?
E&O Liability protects your company from claims if your client holds you responsible for programming errors, software performance, or the failure of your work to perform as promised in your contract.
Coverage includes legal defense costs - no matter how baseless the allegations.
E&O insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy.
When is Errors & Omissions needed?
We generally recommend this coverage be at the foundation of every company’s insurance portfolio. Usually it is wise to purchase the coverage prior to product or site launch, or when you have customers. It can be a contract requirement from companies that you perform services for.
Why do I need Errors & Omissions?
Don’t Be Fooled. Professional Liability coverage is not provided by a Commercial General Liability policy. Commercial General Liability does NOT provide coverage for programming errors, contract performance disputes or any other Professional Liability issues. IT consultants and companies who have General Liability without Professional Liability (Errors or Omissions) coverage are taking a serious risk. It’s like a doctor practicing medicine without Malpractice insurance.
Mistakes Happen. Every company messes up at some point. For example, you recommend to a client that they run a certain test of their system, after you did some extensive work on it. The client takes your advice, the system crashes, and they are unable to conduct business for a whole week. The client becomes enraged, calls his attorney, and looks to you for reimbursement.
You Can’t Be Everywhere. Sometimes you can’t personally handle every job.
E&O coverage insures not only your mistakes, but also the mistakes of the employees and Independent Contractors you hire.
Most Importantly:E&O insurance might save you from extreme embarrassment, a lost client, or worst of all, a bad reputation.
Why You need Errors & Omissions? A service
The risk of legal assessments caused by a service mistakes makes E&O insurance an absolute necessity for any business. Even with work that seems less risky, there’s no outsmarting the consequences of a lawsuit. Practically any firm or individual that improperly performs services can cause a client to suffer economic loss.
Commercial General Liability does NOT provide coverage for service errors, contract performance disputes or any other Professional Liability issues. Consultants and companies who have General Liability without Professional Liability (Errors or Omissions) coverage are taking a serious risk. Even if you’re not at fault, litigation is time-consuming, costly and potentially disastrous to a your firms reputation. E&O insurance is a cost effective way to protect your business.
Typically, a general liability policy does not cover consequential financial loss, and most exclude claims arising out of professional services. To properly cover your exposures, you need comprehensive E&O coverage in addition to your existing General Liability Policy. Optional coverages may include Media and Network liability.
Network Security Liability
Can be Transmission of malicious code (i.e. computer virus), security breach of your network by a hacker, or unauthorized access to, use of, or tampering with data or systems.
Means any form of defamation or tort related to: infringement of copyright (including software copyright), trademark, title, trademark, trade name, slogan, or service name; allegations of libel, slander, breach of privacy, product disparagement, trade libel; misappropriation of name or likeness or ideas, plagiarism, infringement of copyright, trademark, or negligence regarding the content of any media communication