Despite your best effort and hard work, a dissatisfied customer may sue you, alleging mistakes were made. These errors can result in serious financial loss to your client or other third parties.
Errors and omissions liability insurance provides essential protection to help you protect your assets when standard general liability insurance does not. Errors and omissions policies pick up where the general liability contract leaves off and can protect you against claims for financial injury that allege your product failed or that allege you failed to perform services.
Coverage features can include:
In today's business world, companies providing products or services to third parties need protection beyond their general liability policies. Among other perils, standard general liability policies respond to claims or lawsuits made by third parties for bodily or physical injury to, or loss of use, of tangible property. However, due to the impaired property exclusion, general liability policies do not provide protection for claims when the insured's product fails to perform without physical damage accompanying that failure. In addition, general liability policies do not respond to claims for injury to intangible property, such as damage to data. Without errors and omissions insurance, other financial losses suffered by one of your customers can be detrimental to your company's bottom line.
Information courtesy of The Chubb Corporation