Everyone makes mistakes. This is not something that can be avoided. In the business world, however, these mistakes can take on a very large importance. This is especially true if you are doing things that involve other people’s money. If you make a mistake that costs them money, they are not just going to ignore it. They are going to come to you and try to get it back. If you cannot pay, they may even take you to court over the money. This is why it is so important for any business to have the lasting protection of E & O insurance.
Errors and omissions insurance will help you with the money that you may have lost in these mistakes. One example would be if you are a lawyer and you are contacted to help someone write up a contract for a sale. If you omit a certain clause in the contract that gives the other party a loophole that they can use to get out of having to pay the full amount, the person who hired you is going to be angry. The whole reason that they hired you, after all, was to avoid that kind of a mistake.
E & O insurance could also come into play if you are a business that handles money and you end up losing it. Believe it or not, this can happen. An irresponsible employee could misplace the money. Someone could give the money to the wrong person and then never see it again. You could make a mistake in your business and spend it in a way that you did not intend. Things like this can be complicated, but the person whose money you lost will not be interested in hearing your excuses. They will just want to get their money back.
No matter what the situation is or how all of the details fall into place, it is a good idea to have the right kind of plan to stay protected. This will help to pay the people back and will also help to keep bad publicity from spreading about your company. In the business realm, this might be even more important than the money itself. If your company looks bad, less people will want to work with you in the future.
You might think that you do not need E & O insurance because you run a very professional business and have never made an error in the past. This is to be commended, by it does not mean that you will be able to keep this clean record going forever. Remember, everyone makes mistakes. You want to make sure that you are not vulnerable when it happens to you.