When you visit your lawyer or accountant, you probably want to know that they have done the job correctly. If you are in a professional service job yourself, you probably realize that your clients expect the same from you. All the same, if mistakes do occur, you might want your errors & omissions (E&O) insurance to help you settle the losses with the client. Still, to preserve your brand and reputation, you will need to strive to prevent mistakes whenever possible. Consider just a few of the ways that can help you maintain a professional reputation.
The Importance of E&O Insurance
Businesses pose liability risks to their customers. On one hand, liability risks might occur when someone falls in your business, or you damage their property. However, other liabilities are less physical, and occur when your professional advice or services cause harm—notably financial harm—to other parties.
Physical losses might fall into the coverage realm of your general liability insurance. However, losses caused by mistakes in services or advice might fall under the umbrella of E&O coverage.
If a loss falls into this category, a property-tailored E&O policy might help you pay for the settlements or legal costs arising from such mistakes. Professionals like lawyers, CPAs, consultants, doctors and even contractors and plumbers might need this coverage.
Preventing E&O Claims
Of course, E&O insurance is good to have. But the fact is, you don’t want to constantly face the prospect of making claims on the policy. First, this can make you a higher risk to insure in the future, and you might face higher E&O policy costs down the road. Second, constant E&O claims can easily damage your professional reputation and put your business on the line.
So, what can you do to protect yourself against E&O risks:
1. Abide by All Professional Standards
You must play by the rules. It protects not only your business, but also your clients. Therefore, you have to know the laws and regulations that affect your business. You shouldn’t strive to just meet these standards, but also surpass them.
2. Do Your Research and Stay in Your Lane
Clients come to you for a certain service. That’s why, if you aren’t as familiar with one service as opposed to others, you might need to do further research on the topic, or even refer the client to another service. For example, a lawyer who focuses on real estate law shouldn’t attempt to handle a medical malpractice claim someone files against their doctor.
3. Keep an Open Door
The better you know your clients, the better you can help them out. An open door policy can help you build this relationship. Familiarize yourself with their needs, and always explain to them exactly how you plan to help them. Provide them with all necessary documentation that they need to make informed decisions. All in all, the more professional you can be, the more your clients will trust you. The lower your E&O risks might prove in the end.