Errors and omissions (E&O) insurance (also referred to as personal liability insurance) can protect you and your business from liability for mistakes made in certain instances. If a customer files a claim against your organization for an error made in professional services provided, you could be covered by E&O insurance.
What is Covered?
Though you try to run a tight ship, mistakes do happen. Those covered by E&O insurance are errors, omissions, negligence, good faith violations, misrepresentation, incorrect advice, libel and slander. E&O & fraud, on the other hand, is a more complex topic. Fraud is only covered in certain cases through this particular insurance. Whether or not lawsuits with allegations of fraud are covered by personal liability insurance depends on who is accused of committing it, the type of fraud and the insurance policy.
How To Protect Your Business
Even if you set out with the best of intentions, in the business world, lawsuits can be filed. This means that you should protect yourself and your business with as much insurance as you can afford. Although you may not view yourself or your company as capable of fraud, you could still be accused of it. Review your E&O insurance policy carefully to find out if you are protected in the event that the unthinkable occurs.