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The Story Behind Errors and Omissions Liability

At some point in your business operations, you may have a disagreement with a business partner or a client over the results of a decision or a perceived mistake. This situation could lead to claims of negligence in practice, sometimes ending in a lawsuit dealing with errors and omissions. The nature of the claims and concerns will vary by industry and scenario.

The Legal Ground for Error and Omission Claims

There is a range of E&O claims that can be filed against you or your company, but the legal grounds for proof remain the same. To have a valid case, the party must establish that the work did not meet reasonable expectations or contractual obligations according to industry standards. It must also be shown that damages occurred and that any damages were a direct result of the work your company did or didn`t do.

The Situations That Lead To E&O Claims

You don`t have to make a big mistake for a claim to be made against you or the company. Situations involving poor communication where a consumer draws their own conclusion may lead to feelings of neglect or misinformation. Clerical errors or processing paperwork late can also lead to situations of confusion where the client wants retribution for their hassle or frustration.

The financial liabilities associated with errors and omissions can be covered with an E&O policy. Check with your insurer to see how much you are covered.