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Around 36 to 53 percent of all small businesses are involved in some type of litigation; but overall about 90 percent of small businesses are involved in a lawsuit at any time. The numbers do not need much explaining. No one can guarantee that their business won’t be hit by a lawsuit at some point. In the event of litigation, a business needs to be prepared for what comes with being sued. Unfortunately, it’s not cheap, but the threat is very real.
That’s why staying proactive and ready for any situation is highly beneficial to any company, whether they are big or small. One of the most basic steps of protection includes purchasing Errors & Omissions (E&O) Insurance. Once a business is covered, then there’s a safety net that will help keep that business afloat while handling the litigation and insurance claims process properly.
However, there’s more to it than just purchasing insurance coverage and letting it dig you out of a tough spot. From reputation management to litigation, this is what to do if your business faces an E&O claim.
Get an Attorney Involved
It’s the most logical solution. Getting a quote from an attorney should be first on the list once a business realizes they are actively involved in a litigation case. If your business has E&O coverage, than your insurer will cover the cost of litigation defense as well as any potential settlements. This will significantly lessen the potential financial impacts of a lawsuit or claim, which ordinarily could cripple a smaller business.
An expert who can go through those court papers and make sure everything is valid. Their services are heavily needed at this stage. If any information on the case is incorrect, then a litigation hold can be set in place. All of this can help stall a case until you’re able to get ready.
Next, give whatever resources you have available for the attorney to start their case. Documents, photos, video, emails, voice messages and other sensitive files can really help when your business is taking some serious heat. Another important thing to note is to remember to stop contacting the complainant.
Contact Your Insurance Company
Every case is going to be different, which is why it’s crucial to contact your insurance company to make sure that whatever policy you have is going to cover the expenses. The most common insurance policies you’ll find with a business includes general liability insurance, professional liability insurance, an employment practices liability policy or employer’s liability insurance, which also encompasses workers’ compensation.
If you’re unsure about what your policies may cover, contact an agent to find out. Whatever you do, never assume you’re going to be covered. Because if the accident falls outside of your policy range, then further problems will arise.
Your final step is going to be how to decide to pursue the case. But make sure an answer is absolute; trying to ignore the case will exacerbate the issue. With the proper E&O insurance coverage however, it’s safe to say the problem won’t fester.
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.