Errors & Omissions

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In the current scenario, professionals are working in an increasingly litigious atmosphere which leaves them liable for various allegations made by dissatisfied clients who may feel that they might have been harmed by the actions of a professional. If you have the Errors & Omissions (E&O) insurance policy, you can protect yourself from such lawsuits as the insurer gives coverage so that you are not left alone to deal with complicated financial obligations that can otherwise hamper your business operations as well.

Read More: Who Should Buy Errors & Omissions Insurance?

Here are some reasons for buying the E&O insurance policy –

You impart advice and consultancyClients can file a lawsuit if there is some mistake in the advice given by you
You give an expert adviceIn case you unintentionally make mistakes in design, plan or calculations, a case can be filed against you
You handle clients’ informationYou could be held responsible if you accidentally disclose the client’s pivotal details
Clients make it mandatoryMany clients insist on the professional liability insurance before they start doing business with you
Your professional body needs itYou might be associated with a professional body where E&O is compulsory

Here are some reasons that might make it necessary to have E&O insurance or a professional liability insurance policy –

  1. High risk of lawsuits – Not having a professional indemnity insurance may put you at high risks as many companies may take advantage of you since you are not completely secured. Moreover, it can put you in a financial loss if a case is filed against you as you will lose everything that you have earned in your life, like home or assets, etc.
  2. Risk of losing business – Many clients prefer those companies which have E&O for doing business. They want to know if you or one of your employees make a mistake, whether it will be covered or not. If you can’t offer such kind of coverage, you will not be even considered for the business purpose. However, it doesn’t mean you can simply purchase the insurance policy, show the proof, get the business and then cancel it.

Remember, word of mouth is the most important marketing tool. If the word is that clients can’t trust you in case something goes wrong, then word of mouth will be your biggest enemy. Worse yet, if you cause some damages to one company and fail to pay the compensation, how many clients do you think will agree to do business with you. Here, both your present and future business prospects will be affected.

Read More: What Does Errors & Omissions Insurance Cover?

Moreover, when you decide not to buy this insurance policy, you’re gambling not only with your business requirements but also with personal assets. If, God forbid, the verdict is against you, and you couldn’t pay for it, you could end up having your personal assets, like home, car, land, etc.; seized.


A medical tele messaging company, ABC Telemetrics, was responsible for answering calls from patients/families and forwarding to a group of physicians. ABC Telemetrics was handling this account for the last three years.

While there were instructions that all calls received by a specified doctor should be directed either to a medical centre or the on-call doctor, whose identity was also required to be disclosed to the patient, this procedure hadn’t been followed in years, nor it had been reviewed.

One evening a call came for a specific doctor, and ABC Telemetrics tried its best to reach out the medical centre. The company then contacted the originally specified doctor rather than the on-call doctor. Though the original doctor answered the call; a delay occurred which lead to the death of the patient.

A lawsuit was filed against ABC Telemetrics by the family of the deceased patient. Luckily, the tele messaging company had Errors & Omissions insurance policy, and the insurer came forward to defend ABC Telemetrics.

The case dragged for months as the court had to find out that whether the delay caused the death of the patient or not. Finally, a settlement was reached, and ABC Telemetrics decided to compensate the aggrieved party. Here the insurance company paid the settlement amount along with legal charges.

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About The Author


MBA Finance

Amit is an experienced insurance professional with 7 years in the industry, specializing in Errors & Omissions Insurance. Writing for SecureNow, he provides clear and insightful blogs and articles to help professionals understand the importance and nuances of E&O coverage. His expertise ensures that readers receive practical advice on protecting themselves from potential liabilities and professional risks. Dedicated to making complex insurance topics accessible, Amit stays updated on industry developments, delivering valuable content that empowers professionals to make informed decisions about their E&O insurance needs.