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E&O claims are common risks for many companies, so you need employment practices liability to protect yourself against legal and financial consequences. E&O or errors and omissions insurance is crucial for any business that offers professional services and advice.
Does your company offer services or advice to customers in a professional capacity? Has someone accused you of errors and omissions related to your duties, or are you worried about facing such accusations? If so, you need to take steps to protect your company from an E&O claim.
Avoiding E&O Claims
You can avoid E&O claims by taking specific measures to protect your company against such risks. Some of the most critical steps are:
- Vetting clients carefully
- Developing clear contracts
- Improving communications
- Improving documentation processes
- Screening employees and vendors
- Keeping up-to-date on education, training, and licensing
- Developing a thorough review process
- Avoiding providing services and advice for which you aren’t qualified
- Consulting with a capable commercial insurance broker
Vetting Clients Carefully to Prevent E&O Claims
Always vet your customers carefully to ensure they fit your company correctly. You can do this by asking for referrals or references and learning about prior experiences with other firms in your field of specialization.
Developing Clear Contracts
Put more effort into developing clear and comprehensive contracts. They should always include clearly defined responsibilities and deliverables and outline the customer’s responsibilities. Providing a process overview, projected timelines, and contingencies is also advisable.
Improving Communications
Effective communication helps prevent many E&O-related issues. Contact throughout every stage of the project and provide frequent updates. It is also essential to immediately communicate any potential problems and delays to the customer.
Improving Documentation Processes
Keeping accurate and up-to-date records is always important. But it can be especially crucial for protecting your company against errors and omissions claims. Always document phone calls and meetings, whether online or face-to-face.
Screening Employees and Vendors
Pre-employment screening is integral to onboarding new workers. But remember to screen third-party vendors as well. Perform thorough background and reference checks, and follow up with an interview.
Keeping Up-To-Date on Education, Training, and Licensing
E&O claims often result from insufficient training and education. You can avoid such issues by keeping up-to-date on regulations and licensing requirements and instituting a policy of continued education for key personnel.
Developing a Thorough Review Process
Having a review system enables you to catch potential problems and mistakes before they occur. Always check your work and processes via a thorough review process.
Avoiding Providing Services and Advice for Which You Aren’t Qualified
Errors and omissions often occur when providing services or advice you aren’t qualified to provide. Ultimately, there is some benefit to working outside your comfort zone. But knowing your limits and when to stay within them is just as important.
Consulting With a Capable Commercial Insurance Broker
Finally, consult with a commercial insurance broker to get appropriate E&O coverage. These professionals can educate you on effective risk management policies and practices that will help you avoid E&O claims.
It can be challenging to avoid E&O claims if your business provides professional services or advice to customers. Even with extensive experience in your particular industry, you sometimes don’t know if the service or advice you are giving opens you up to liability.
But you can avoid costly claims by consulting with a reputable commercial insurance broker and taking steps to manage E&O risks. Hopefully, the tips outlined in this guide have given you a good starting point to avoid legal complications.
About Transparity Insurance Services
Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.