Errors and omissions insurance
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Errors and Omissions Insurance

The right contractors’ insurance can mean the difference between an effective business and bankruptcy from liability concerns. No matter how safe your practices may be, no matter how careful you are to abide by OSHA standards, accidents happen on the job site. In fact, they happen all the time. It pays to have the right coverage available so that when the unthinkable occurs, you are covered. This includes errors and omissions insurance.

General Liability

General liability insurance should be carried by every business owner. It is, in fact, required by law. Its intended purpose is to protect you from unexpected injuries and accidents that happen on your business premises or as a result of you conducting business. When someone falls off of a ladder, has a car accident in your lot, falls through a wall on the job site, or even accuses you of slander, general liability kicks in.

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There are, however, situations in which general liability does not protect you. This is where errors and omissions insurance becomes so important.

Errors and Omissions

This kind of coverage applies when you employ independent contractors, consultants or advisors who make mistakes and cause you liability issues. If, for example, a consultant gives bad advice to a customer which ends up disastrous, the customer can come back and file suit for it. Having this kind of insurance coverage will protect against litigation and out of pocket settlements.

For example, if you had the option to remove a tree from a property and fail to do so, then the next week a storm knocks that tree over to damage a home, this form of coverage will greatly lessen your liability issues and defend you against the costs of litigation.

Not the Same

At a glance, it can look like general liability is the same thing as error coverage. While both cover you and reduce litigation costs in the case of unforeseen occurrences, this is where the similarity ends. Liability covers contractors whose employees have accidents, or who are faced with lawsuits from others being injured on the business premises or job site.

Errors and Omissions insurance, on the other hand, is specifically tailored to independent consultants, advisors and the like who provide advice and indirect support to job sites. If a worker falls off of a ladder, liability covers it. If a structure collapses because of an architectural defect, error coverage will be necessary. If falling debris hits a pedestrian, you’ll want liability. If a structure collapses because an advisor had you build it on uneven ground, you will need error coverage.