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Wednesday, May 14, 2008


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Errors & Omissions Liability Insurance

What is Errors & Omissions Liability Insurance?

Errors & Omissions Liability Insurance protects your company from claims if your client holds you responsible for programming errors, software performance, or the failure of your work to perform as promised in your contract.

Coverage includes legal defense costs - no matter how baseless the allegations. Errors & Omissions Liability Insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy.

Coverage extends to both W2 employees and 1099 subcontractors, and can be worldwide in scope.

When do I need Errors & Omissions Liability Insurance?

We generally recommend Errors & Omissions Liability Insurance coverage be at the foundation of every company’s insurance portfolio. Usually it is wise to purchase the coverage prior to product or site launch, or when you have customers.

Why do I need Errors & Omissions Liability Insurance?

Don’t Be Fooled. Errors & Omissions Liability Insurance coverage is not provided by a Commercial General Liability policy. Commercial General Liability does NOT provide coverage forerrors, contract performance disputes or any other Professional Liability issues. Consultants and companies who have General Liability without Errors & Omissions Liability Insurance coverage are taking a serious risk. It’s like a doctor practicing medicine without Malpractice insurance.

Mistakes Happen. Every company messes up at some point. For example, you recommend to a client that they run a certain test of their system, after you did some extensive work on it. The client takes your advice, the system crashes, and they are unable to conduct business for a whole week. The client becomes enraged, calls his attorney, and looks to you for reimbursement.

You Can’t Be Everywhere. Sometimes you can’t personally handle every job. Errors & Omissions Liability Insurance coverage insures not only your mistakes, but also the mistakes of the employees and Independent Contractors you hire.

Most Importantly: Errors & Omissions Liability Insurance might save you from extreme embarrassment, a lost client, or worst of all, a bad reputation.

Errors & Omissions Liability Insurance will help protect your business

It’s a competitive business environment. Your service standards and reputation are what set you apart from the competition. Customers demand more and expect more. They are not easily pleased and when their expectations are not met; a dispute may arise. They may seek their remedy in court, believing your company’s assets are an available source of relief.

When you are faced with a lawsuit from a customer, win or lose, the financial ramifications are serious. Every company wants to mount and fund the best defense possible. But sometimes even the best efforts aren’t enough and a company may face costly damages, in addition to legal fees. Gaston Insurance Group offer Errors & Omissions Liability Insurance for most medium and larger private and public companies.