Errors and Omissions Insurance
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Errors and Omissions Insurance

Humans make errors every day. Generally, these errors don’t cost us anything, and we can revisit and correct them later. However, when we talk about a business, a small mistake can cause them to lose thousands of dollars, or even worse, a lawsuit filed against them.

Whether it’s four people running a company from their garage, or a forty-four-person team sitting in a big glass office, all employees make errors. However, for every mistake made, the whole company has to suffer. And the owner has to pay for the damages from their pocket.

With Errors and Omissions insurance, the company can protect itself from paying a considerable amount to a third party for a silly error. Mistakes are inevitable, making errors and omissions insurance crucial for businesses of all sizes.

As a local Canadian company, Comparewise understands how it’s essential to protect what is most vital for you and your business. Our platform offers a comprehensive database of Errors and Omissions insurance providers, making it easier for you to compare them.

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What Is Errors and Omissions Insurance?

Errors and Omissions insurance is a type of professional liability insurance. It protects professionals, companies, and their workers against claims made by clients or third-party people of negligent actions. The insurance covers defense costs, fines, and settlements resulting from allegations.

In simpler terms, suppose your client claims that your work or services were late, inaccurate, or never delivered and files a lawsuit against your company. In this case, you would require Errors and Omissions insurance to cover the cost. Suppose you are in a professional service or have a business offering advice or services like financial advisor, insurance agent, consultant, or lawyer. In that case, you will use this insurance someday or the other.

Most Errors and Omissions insurance providers cover the cost of both legal fees and settlements, up to the coverage amount specified by the company. It helps mitigate and eliminate any potential liabilities.

For instance, your software neglected to catch a typographic error on a large order on engraved wedding invitations. Assume you notice the mistake before the invitations are sent out. In that instance, you will have to inscribe the whole batch again, leaving your company in losses. On the other hand, if the order was sent out and the client identified the error, they can file a negligence case against your company. In this situation, Errors and Omissions insurance is quite helpful.

This unique insurance covers the client against all the liabilities not covered in a traditional liability insurance policy.

Why Do You Need Errors and Omissions Insurance?

Making mistakes is human nature. Without Errors and Omissions insurance, you will have to pay and deal with all the liabilities yourself. It doesn’t matter if you have a small home office with two employees or are running your company from multiple locations in the country. Either way, you need Errors and Omissions insurance to safeguard your company.

Provides Financial Aid

In case of a lawsuit filed by a third party, the Errors and Omissions services will protect you and your company by providing financial aid. Most insurance policies will cover the legal fees, including the cost of a lawyer hired to fight your case and all the additional expenses incurred during the documentation process.

Errors and Omissions insurance also covers any penalties that might be fined on your company by the court of law.

Wide Range of Coverage

Errors and Omissions insurance protects you against a wide range of errors and infringements. These include infringement of any copyright, trademark, or trade secret. Apart from protecting your company from any lawsuits caused due to errors caused by your employees or inefficient service, these policies also cover the misuse of confidential information.

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Assures Peace of Mind

An Errors and Omissions insurance ensures peace of mind for all business owners. This insurance policy is especially pertinent to a small business. This is because they might hire employees who are not as professional or work with their families. In such a case, if an employee makes an error, then you need to ensure that your policy covers it.

Any damage caused due to an error by your employee is your responsibility, and Errors and Omissions insurance will keep you protected and sound-minded.

Who Needs Errors and Omissions Insurance?

All businesses and professionals who offer a service to their clients in return for a fee should protect themselves and their companies with errors and omissions insurance. If you do not perform your service properly or deliver it on time, the effects could cost your clients. They can, in turn, file a lawsuit against you and your company.

An Errors and Omissions insurance is customized depending upon the risks of your industry. Both a printing company and an electrician need this liability insurance. Still, they have varied risks and require a completely different type of coverage.

The following demonstrates how Errors and Omissions insurance can protect a few common professions and businesses.

Real Estate Agents

As a real estate agent, you can make a few errors or mistakes while closing down a deal. An Errors and Omissions insurance helps brokers and real estate agents to pay for lawsuits over disclosure errors, mismanagement, failure to close a deal, or other similar professional issues. Your clients, buyers, or sellers may even refuse to work with your firm without errors and omissions insurance.

Insurance Agents

As an insurance agent serving your clients with advice, you are prone to errors, leaving your clients with inadequate coverage. An Errors and Omissions insurance can protect you against an oversight that left your client vulnerable to a few liabilities or bad advice that led to insufficient coverage. Your clients might also demand an errors and omissions insurance proof before agreeing to work with you.

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IT Professionals

As an IT professional, there is a chance that your system can get hacked in a cyberattack, leading to loss of client data. An Errors and Omissions insurance is essential to protect you against client lawsuits over data breaches, contract disputes, or even coding errors. Most clients only work with tech companies with an active Errors and Omissions insurance policy.

Tax Consultant

Tax consultants and preparers might be overloaded with work and miss out on a deadline for tax submission, leading to a loss for their clients. An Errors and Omissions insurance covers the costs of lawsuits filed over accounting errors, lost documentation, or missed deadlines. It also offers indirect protection for the clients if there is an error in their tax filing. Before your customers decide to use your financial services, they might ask you to provide them with proof of your errors and omissions insurance.

Features of Errors and Omissions Insurance

Errors and Omissions insurance plan is a type of professional liability insurance that offers attractive features for businesses providing professional services. At Comparewise, you can search for multiple providers providing the policy and compare their features and coverages. However, the coverage and the policy features can differ, depending upon your industry.

Here are a few features that you will find in most insurance policy providers listed at Comparewise.

  1. Most providers offer a high coverage amount to their clients, which can help pay fees and penalties for a lawsuit. You can choose and customize your coverage amount based on the risks associated with your industry, the size of your company, and your budget.
  2. Based on your industry and coverage, you can pick an affordable monthly premium for your business based on your budget.
  3. The policy keeps you protected against a wide range of legal and financial liabilities that may arise due to professional risks. You can claim the insurance against any legal troubles you or your employees might face.
  4. Besides financial aid, the policy also provides peace of mind to small business owners. Accidents can occur at any time, but keeping your business insured is what’s important.

What Does Errors and Omissions Insurance Cover?

While the coverage will depend upon your industry, the basic scope of liabilities that an Errors and Omissions insurance cover are listed below.

Error in Service

If you or your employee cause an error while providing service to your client, then it will get covered under this insurance plan.

Negligent Action

In case your employee’s negligent actions harmed your client’s service or reputation, then it will get covered under this insurance plan.

Misrepresentation

Suppose you or your employee unknowingly misrepresent your service in any manner that caused a loss to your client. In that case, it gets covered under this plan.

Omission of Information

If you or your employee forgets to mention an essential piece of information to your client, which in turn caused them loss, it will be covered under this plan.

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Violates Good Faith or Failure to Provide Service on Time

Perhaps your company cannot provide service to your clients on time or violates their faith or trust. In that instance, the insurance company will cover the upcoming financial threats.

Lawyer’s Fees

What if your clients file a lawsuit against your company or an employee related to business matters? Then, the insurance provider will cover the lawyer’s cost who will fight your case.

Settlements

Suppose the lawsuit doesn’t end in your favor, and you have to pay the penalty for the error caused by your business. In that case, the insurance provider will cover that as well. Additionally, it will cover all the charges made during the documentation process.

What Does Errors and Omissions Insurance Does Not Cover?

Errors and Omissions insurance keeps your business safe from unforeseen mistakes or errors. But it does not cover a few aspects which might be illegal or were caused knowingly by you or one of your employees. Here are a few things that Errors and Omissions Insurance does not cover for your business, irrespective of its size.

Wrongdoings

The insurance provider will not pay for any wrongdoings your business purposefully committed, such as deceiving the customer with wrong information.

Illegal Activities

Like any other business insurance policy, the errors and omissions insurance policy will not cover any charges or penalties caused due to an illegal activity committed by the company.

Employee Illness and Injury

The insurance provider will not pay for any injury or illness caused to your employee while working with your organization. You will have to insure your company with a Worker’s compensation plan to cover this aspect of your business.

Discrimination and Harassment

The insurance company will not pay any legal fees for a lawsuit filed due to discrimination or harassment caused in the workplace by your employee.

How Much Does Errors and Omissions Insurance Cost?

There are a variety of insurance providers in the market that offer multiple features for a pretty diverse cost plan. The actual cost of your errors and omissions insurance plan would depend upon various factors. For instance, the insurance cost for a lawyer and an IT consultant would be completely different. Usually, the lawyer will have to pay more, as there is a little more risk involved in their line of business.

Your Errors and Omissions insurance cost will depend on your profession, experience, number of company employees, subcontractors, gross revenue, and insurance company loss ratio. In simpler words, if the businesses related to your industry file more claims generally, then the insurance premium for your company will be higher.

For instance, the price for an errors and omissions insurance plan for an accountant who consults customers about their finances will be somewhere around $350 per year. On the other hand, the insurance premium for a home inspector can be as high as $500 per year.

While choosing your insurance plan, you need to make sure that you compare different providers. This includes the features they offer, their coverage policy, and their monthly premium. You can use Comparewise’s innovative algorithm to find and compare various errors and omissions insurance providers in Canada.

Remember that a company will offer you their insurance quote for free. You pay solely after you have subscribed to their policy.

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How to Buy Errors and Omissions Insurance in Canada?

Buying an insurance plan to secure your business can be a tedious task. Traditionally, you would have to search for your needs on Google and then look through hundreds of options before you can start comparing them. This takes up a lot of effort and time.

With the help of Comparewise, you can easily browse through multiple verified insurance providers that offer Errors and Omissions insurance in Canada. Being a local company, we understand the difficulties small businesses face and have designed our algorithm accordingly.

You can use our “Get Started” option on the homepage and list out all your needs and requirements, along with the size of your company. Our platform will suggest the best insurance providers for your business based on your input. You can compare them and then choose one as your partner.

Comparewise is available everywhere in Canada, saving you all the time it would take to plan and set multiple face-to-face meetings with insurance providers.

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FAQs about
Errors and Omissions Insurance

What is errors and omissions insurance?

Suppose your client claims that your work or services were late, inaccurate, or never delivered and files a lawsuit against your company. In this case, you would require Errors and Omissions insurance to cover the cost. Suppose you are in a professional service or have a business offering advice or services like financial advisor, insurance agent, consultant, or lawyer. In that case, you will use this insurance someday or the other.

Why do you need errors and omissions insurance?

Making mistakes is human nature. Without Errors and Omissions insurance, you will have to pay and deal with all the liabilities yourself. It doesn’t matter if you have a small home office with two employees or are running your company from multiple locations in the country. Either way, you need Errors and Omissions insurance to safeguard your company.

Who needs errors and omissions insurance?

An Errors and Omissions insurance is customized depending upon the risks of your industry. Both a printing company and an electrician need this liability insurance. Still, they have varied risks and require a completely different type of coverage.

Errors and omissions insurance is great for:

  • Real estate agents
  • Insurance agents
  • IT professionals
  • Tax consultants
What does errors and omissions insurance cover?

Errors and omissions insurance covers:

  • Errors in service
  • Negligent actions
  • Misrepresentation
  • Omissions of information
  • Violation of good faith
  • Lawyer’s expenses
  • Settlements

Errors and Omissions Insurance
made Simple

No obligation, Free to apply

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