Arizona Errors and Omissions Insurance
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What is Errors & Omissions insurance?
Errors and Omissions, otherwise known as Professional Liability insurance, protects your business against claims of negligence, misrepresentation or mistake, as well as document or paperwork errors.
According to the U.S. Small Business Administration’s Office of Advocacy, there were 621,045 small businesses in Arizona as of 2022. They accounted for 99.5% state-wide businesses, but these numbers are on the rise.
There are many opportunities to make mistakes, regardless of what industry you work in, what type of products or services you offer. Even if you have a great track record, one mistake can lead to a lawsuit against your company.
Errors & Omissions insurance is essential to small business owners in order to safeguard their future financial security in a highly competitive market. Your business is protected against any claims arising from your negligence (errors) and insufficient services (omissions).
What does Errors and Omissions insurance cover?
Arizona’s Error and Omissions insurance covers expenses up to the limits specified in your contract. You will save:
- Legal costs – Most lawyers charge an hourly rate. Even if the case is resolved quickly, it can be costly to hire good legal counsel. The longer it takes for the matter to be resolved, the more money you will have to spend.
- Court Expenses Filing documents with court, underwriting charges and other administrative costs.
- Settlements: To save both sides money and avoid expensive, long-drawn-out litigation costs, most claims are settled outside of court. You might need to pay a client a specific amount depending on the advice of your legal counsel.
- Judgments – If your case goes to trial and the judge rules in favor of the plaintiff, then you will need to pay the adjudged amount. Otherwise, there is the possibility of a lien being placed against your business assets.
Who needs Errors and Omissions insurance?
Errors & Omission insurance is recommended for professionals and businesses whose work involves providing advice, educated recommendations, or designing solutions.
No matter if the claim is valid or not, Errors & Omissions Insurance will protect you, your business, and your reputation from costly consequences.
Professions that often require Errors and Omissions insurance iInsurance include, but are not limited:
|Home Care Providers and Businesses||Yoga Instructors|
What is the cost of Errors & Omissions insurance?
Arizona’s average cost for Errors and Omissions insurance is approximately $669 per year. However, it depends on your business. Like any insurance, the greater the risk element, the higher you will have to pay for it.
These are the factors that will affect the cost of your Errors and Omissions coverage:
- Your business’s priorities, location, and risk appetite
- The turnover and size of your business
- How much insurance you require
- If any, your previous claims history
- The persons being covered – their qualifications, suitability to the job, and any past claims
Does Errors and Omissions include General Liability coverage?
Errors and Omissions (Professional Liability) coverage is not included in a General Liability policy. General Liability covers bodily injury and property damage caused by customers, vendors or others. Errors and Omissions coverage includes missed deadlines or other issues that could arise from your services.
Learn more: Professional Liability vs. General Liability insurance
Learn more about E&O insurance in the states where you work.
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