You need errors and omissions insurance if you’re in the business of providing a service to clients for a fee. Errors and omissions insurance policies usually cover the business owner, both salaried and hourly employees, and subcontractors working on behalf of the business.
Errors and omissions insurance is typically customized to meet specific needs of a business or industry. For example, a printer has different risks than an electrician does in a standard business day. Both have the need for liability insurance, yet each needs a completely different type of coverage.
Errors and omissions insurance policies vary from company to company, and are written to reflect inherent risks and common exposures particular to different types of businesses.
Even if claims are found to be unwarranted, legal fees and other related expenses can quickly eat up a company’s cash reserves in no time, causing a financial hardship. Most errors and omissions insurance policies cover judgments, attorney fees, court costs and settlements up to the limits of the policy.