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 E&O Insurance: Why So Important for Your Business

E&O Insurance: Why So Important for Your Business

Errors and Omissions insurance, also referred to as professional liability insurance, is crucial to businesses that offer professional services, particularly technology firms. Oftentimes, in the process of handling clients’ needs, IT professionals may make errors that may cost the business huge amounts of money. Such losses could accrue as the firm struggles to institute defense and in compensating the offended clients in the event that they lose the case. Realizing this, there are several reasons why E&O insurance is so important for your business. Subscribing for this insurance policy ensures that your business is insured against errors and omission.

Insure Against Professional Liability Risks

Obtaining E&O insurance shields a business from an array of professional liability risks that could see your business, large or small, into irreparable financial problems or, even worse, total closure. Any service-based company offering technological services to its clients is susceptible to various risks related to professional and/or human errors and omissions. These include technological and network failures as well as software glitches that could result in a client firm’s business interruption, leading to losses. In such a case, a client business may file a lawsuit seeking compensation for the losses accrued due to the errors. Without an E&O insurance cover, such liabilities can drain your firm’s financial resources and possibly result in business closure. It is thus imperative for business managers to buy this type of insurance and protect their businesses against such unanticipated failures.

Save Your Business from Closure                   

Professional liability insurance could determine whether you remain in business if you are facing lawsuits from clients seeking compensation for alleged negligence or failure on the part of your IT business. Defending against such allegations can be financially disastrous. In such a case, professional liability insurance could come to the rescue of your IT Company. The insurer could cover all defense expenses as well as pay any compensation that the court awards to the complaints. This underscores the need for E&O insurance to avoid being kicked out of business in case of unprecedented technical errors and omissions, or mere human errors, which are almost certainly bound to happen.

It is noteworthy; also, that some clients insist you must have professional liabilities insurance before doing business with your firm. Obtaining the suitable E&O insurance cover bolsters your chances of attracting such customers. Businesses with E&O insurance are able to attract investors unlike those that lack this crucial insurance cover.

It is imperative that business executives, particularly those operating IT companies, obtain E&O insurance and protect their businesses from the many errors and omissions that they are vulnerable. This will make them operate confidently and survive any lawsuits resulting from professional errors. Insure your business against errors and omissions today and save it the many potential losses.

Call Insurance By Design at 972-499-3414 or 866-840-8004 to get professional advice and information regarding professional liability insurance and obtaining the most suitable Errors & Omissions Insurance for your business.

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