- Errors or omissions in your services provided
- Violation of good faith and fair dealing
- Inaccurate advice
Common Errors and Omissions Claims Examples
- Accountant providing inaccurate financial advice to your clients. As a result, they file a claim against you.
- Interior designer using the wrong colors to repaint a client’s room. When your client sees it, they file a claim against your small business for breach of contract and to pay for the materials to restore the color.
- Real estate agent forgetting to include important details about a home. The buyer files a claim against your real estate firm for negligence.
- Marketing consultant providing advice that caused your client to lose money on their product or service. They file a claim against your marketing company as a result.
- Tax preparer making a calculation error which caused your client to have to pay a penalty. As a result, they sue your accounting firm.
- Public relations firm creating a communication strategy for another business to improve its reputation. Instead, it causes a negative reaction and the business owner sues after seeing a decrease in sales.
What Kinds of Claims Are Not Errors and Omissions Claims?
- Slips or falls
- Property damage
- Reputational harm
- Work-related injuries or illnesses
- Data breaches
- Workers’ compensation insurance
- General liability insurance
- Commercial property insurance
- Cyber insurance
How Does the Errors and Omissions Claims Process Work?
- Submit the claim’s information to your insurance provider. Be sure to do this as soon as possible because some insurance policies may have a certain period of time that you need to report a claim.
- Ask your insurance carrier to help you find a lawyer that specializes in E&O claims. This lawyer will review the claim and ask for a summary of information, including who was involved.
- Work with your lawyer and insurance company to agree on a settlement amount with your employee or customer that filed the claim. Your E&O policy can help pay for this settlement.
- If you don’t reach a settlement outside of court, your claim will go to trial. Here, your E&O policy can still help pay for your legal defense costs. However, a jury will decide if the client that’s suing you will receive a settlement and for how much.
Source: The Hartford, “What Is an Errors and Omissions Claim?” thehartford.com website. Accessed May 11, 2022. https://www.thehartford.com/professional-liability-insurance/errors-omissions-insurance/claims
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