I started my small business thinking mistakes were rare. Turns out, they happen, more than I liked to admit. Errors and Omissions insurance, or E&O, is something I wasn’t too familiar with at first. But man, it’s saved my bacon more than once.
So, here’s the thing: E&O, sometimes called professional liability, protects against claims like “you screwed up my project” kind of stuff. You know, the usual “oops, I missed something important” moments that could cost thousands. I know, sounds dramatic, but believe me, it happens.
I once worked with a client, missed a small detail in their website, and suddenly they were threatening legal action. I panicked, and honestly, without my policy, I’d have been broke. E&O covered attorney fees, settlements, the whole mess.
Why I think small business owners ignore it? Maybe because we feel lawsuits only happen to the big guys. Wrong. They happen to us too. One little mistake, one unhappy client, boom—your savings are at risk.
Clients actually ask for it. Crazy right? Before signing, they want proof that I’ve got insurance. If you don’t, they might just walk. Lesson learned: showing you’re insured is almost like a trust badge.
And mistakes—they’re unavoidable. Even I, careful as I think I am, have slipped up. Miscalculations, typos, missing emails—anything can spiral. E&O insurance doesn’t make mistakes vanish, but it shields me financially.
Some folks ask, “Who even needs this?” I say: if you give advice, or provide a service, or basically charge people for brainpower, you do. I’m talking consultants, accountants, web designers, marketers, IT pros—you get the idea. Even healthcare professionals need it, though different policies sometimes apply.
Coverage-wise, E&O handles lawyer fees, court costs, settlements, and judgements if you’re found “at fault” (even if you really weren’t sometimes). I had a case where a client claimed lost revenue because my work was late; insurance handled it. I only had to focus on fixing the problem.
But it ain’t magic. Intentional fraud? Not covered. Bodily injuries? Nope, that’s general liability. Employee disputes? Separate coverage needed. Cyber attacks? Another policy. It’s like a toolkit—you need multiple tools to cover all holes.
Price? Surprisingly reasonable for me. Around $1,000 a year, give or take, depending on revenue and past claims. I figure, way cheaper than facing a lawsuit alone. And trust me, legal fees pile up faster than you can say “oops.”
Choosing a policy—don’t just grab the first one you see. I shopped around, compared three insurers, read exclusions, checked limits. I wanted $1–3M coverage with defense outside limits. Some policies deduct legal fees from the limit, which could be a nasty surprise.
Honestly, I can’t stress enough—E&O gives peace of mind. I sleep better knowing one minor error won’t sink me financially. For anyone in a service-based field, it’s not just insurance; it’s a safety net.
I learned the hard way, but you don’t have to. Mistakes are human. Being prepared? That’s smart.
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