At its very essence, E&O insurance covers mistakes and omissions that you may have unintentionally made while doing your work. For example, if you’re a hairstylist and your client accuses you of damaging her hair with the wrong type of dye, your E&O insurance can pay out claims associated with that mistake.
You don’t even have to make a mistake for E&O insurance to come in handy. If a customer sues you for making a critical error — even if they’re wrong — you’d still have to spend money on a lawyer to defend your business. Errors and omission insurance can pay for those legal fees, up to your policy limit.
It’s worth noting that errors and omissions insurance doesn’t cover your business if you or any of your employees made the mistake intentionally or purposefully omitted information. It’s another good reason why you should make sure you can trust the people you hire!
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.