Business insurance is designed to protect a company from loss, but a loss can take on many shapes and forms. Sometimes losses occur through a drop in stock prices, which even the best insurance policy can’t help. A lesser-known but equally devastating loss can occur through mistakes made by employees of a company. If this is the case, a strong New York E&O policy can be the difference between financial ruin and a detour filling out paperwork to settle a claim.
Errors and omissions insurance (E&O) is coverage that protects both the business and the client. If an accounting error causes a client to lose money, they may file a claim against the business. Even if it was just a mistake, the legal costs alone could ruin a company’s finances as they try to settle the issue. An E&O policy steps in to assist with the expenses of resolution. The policy may include:
- Coverage of legal fees
- Paying for court costs
- Administrative costs
- Paying the settlement amount
- Judgment amounts in the event of court declaration
A New York E&O policy is beneficial for several types of industries. Financial services, such as banker, investors, accountants or brokers should maintain coverage, but it is also good for lawyers, advisors, real estate agents or any other professional services.