7. Errors & Omissions Insurance
In the previous six items, we described ways IT business owners and contractors can manage the risks they're most often exposed to (based on the information from our applications) to minimize the risk of lawsuits. In this section, we have to acknowledge an unfortunate truth: no matter how well you manage your risk, you can't completely eliminate the possibility of a lawsuit. Sometimes, an unhappy customer will sue you no matter how well you kept them updated about deadline changes or handled their complaint or worded your contracts and signoff agreements.
It's kind of a bummer: lawsuits are stressful, expensive, and time-consuming. If you lose, they're even worse. The simple act of offering commercial services opens you up to a world of lawsuit possibilities; the fact that you're operating in the world of information technology, where the stakes and financial investments are often high, means these lawsuits can be worse than usual.
There is good news, though: Errors and Omissions Insurance can pay the expenses associated with a client lawsuit over your work. Most of our customers know this (after all, they're coming to us specifically to buy insurance). Or if they don't know it, they know that their client won't sign a contract until they can demonstrate proof of E&O Insurance.
IF YOU FACE A PROFESSIONAL LIABILITY LAWSUIT, E&O INSURANCE MAY PAY FOR ATTORNEY FEES, COURT COSTS, AND DAMAGES.
This year, a whopping 95 percent of our customers came to us seeking E&O Insurance. To that, we say, "Hooray!" If you haven't yet purchased E&O Insurance for your business, we highly recommend taking some time to read up on how this coverage can benefit your business (see "Further Reading" for suggestions).
To-do item: Consider E&O Insurance to reduce the cost of lawsuits
Risks managed: Lawsuits that bankrupt your company