I often get inquiries about professional liability from companies and individuals who find themselves in the situation where they have never had the coverage before and are now required to have it due to contract requirements. They often do not seen the need for the coverage since a claim has never happened to them – believe me, i understand this completely! The simple fact of the matter is different. We live in a litigious world and as professionals we are often held to a higher standard for our specialized knowledge and thus the need for errors and omissions insurance liability coverage.
For those of us who are unbelievers, that hold the attitude that it will never happen to us, here are some claim examples that we can turn to in order to demonstrate that errors and omissions liability insurance (a.k.a professional liability insurance) is not only relevant in our lives but sorely needed!
An auctioneer was hired to auction off a large estate containing several unique pieces. When the auction failed to bring what the heirs of the estate had hoped for, they sued the auctioneer claiming that he had inadequately advertised the auction by not listing some of the key pieces in promotional brochures for the auction. Compensatory damages would be covered on an errors and omissions insurance policy
A management consultant for a trade association provided services that included event management related to an international seminar hosted by the trade association. During the course of the event preparation, errors were made in the advertising documentation sent to the participants relating to the scheduling and the topics to be addressed by the seminar’s speakers. Consequently, all the advertising documentation had to be reprinted and resent, which generated substantial additional costs. The trade association sought to hold the management consultant liability for the errors and commenced a lawsuit for damages consisting of the cost of reprinting the advertising documents
Professional errors and omissions is a real risk for anyone performing a specialized service. Whether you have ever had a claim in the past or not, the future will be full of litigation as more and more people are aware of their rights and seek compensatory damages for errors. Errors and Omission liability insurance forms part of your defense against such claims.