Why creative professionals need Errors and Omissions insurance

As a professional working in marketing or creative services, you’re held to high standards of accountability by your clients for your work. Often times, managing client expectations can be difficult and can lead to claims arising out of errors and omissions.

Having Errors and Omissions insurance (E&O) can help you protect yourself and your business from economic loss caused by claims from unsatisfied customers.

What is Errors & Omissions Insurance?

Errors and Omissions insurance (E&O) provides coverage for mistakes, oversights, misinterpretations or other inaccuracies made by a professional.

E&O insurance protects you against costly disputes arising from:

  1. Allegations you failed to deliver agreed-upon services
  2. Alleged financial loss caused by errors or omissions in the rendering or failure to render professional services
  3. Allegations of negligence in the performance of your duties

How does E&O differ from CGL coverage?

You may be thinking I already have commercial general liability insurance so I don’t need E&O insurance. That isn’t true because they actually protect you in different ways. While commercial general liability (CGL) insurance is essential for any business it does not cover financial loss which are typically covered by E&O. Additionally, many companies also require potential commercial partners to provide evidence of professional liability coverage before they hire them for work, making  E&O mandatory in certain situations.

E&O claims examples

Below are some examples of the type of claim scenarios that E&O insurance protects you from:

1. A graphic designer is hired by a supermarket to design a promotional flyer. The graphic designer accidentally places the fax number on the flyer instead of the telephone number, causing a delay in the distribution of the flyer while the error is corrected. The supermarket sues the graphic designer for financial loss resulting from the delayed distribution.

2. A marketing consultant is hired by an accounting firm to produce event-related communications. During the course of the event preparation, errors were made in the event schedule copy outlining the keynote speakers and their respective topics. As a result, all of the event schedules had to be reprinted, leading to additional costs. The accounting firm holds the consultant liable for the cost of reprinting the materials.

3. An advertising consultant is hired to create and market an ad for an automotive company. The client is happy with the ad and pays the consultant his invoice. Months later, the client is upset because they haven’t received the boost in sales that they expected. They sue the consultant for failing to deliver agreed-upon product.

With E&O insurance, you can focus on growing your business knowing you and your business are protected during the duration of your project and after. Contact your broker to see how you can purchase E&O insurance to ensure you and your business are fully covered.

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