Insureon Blog

Why Winning an E&O Lawsuit Still Costs Money

29. April 2014 08:26

As you may have read in our post “What Happens If I’m Sued? A Guide to Handling Errors & Omissions Claims,” over half of all small-business owners have been threatened with a lawsuit. Many of those claims are baseless and dismissed before the legal process can fully lurch into action. But some of them aren’t immediately thrown out on legal grounds.

If the issue can’t be resolved out of court, small-business owners must head to trial to defend their professional reputations – and their bank accounts. Each year, lawsuits that stem from errors and omissions / malpractice claims cost small businesses $105.4 billion each year. (For more staggering statistics, read Tort Liability Costs for Small Business, a report about the high price of liability lawsuits.)

Even if you “win” your E&O lawsuit, the process of dealing with it will cost your business time – if not money. Read on to learn why.

When Clients File Errors and Omissions Claims, Small-Business Owners Pay the Price

What does it mean for a small-business owner to “win” their errors and omissions lawsuit? For now, let’s say that “winning” is any outcome other than the court finding you liable and ordering you to pay the injured party a judgment.

Even if you “win” your case, the lawsuit can still be a drain on your resources. Consider the following best-case scenarios:

How Small Businesses Can Protect Themselves from the Cost of E and O Lawsuits

Even though an errors and omissions lawsuit can cost your business money even if you win, you don’t have to play the game alone. Small business insurance policies, such as Errors & Omission Insurance, are designed to help business owners pay for lawsuit expenses – even frivolous ones. The best new? Errors & Omissions Insurance may not cost as much as you'd think. For more on that, read our Professional Liability Insurance Cost Analysis.

To learn more, check out our blog post “Your Business Is Facing a Civil Lawsuit. Now What?

Tags:

Errors & Omissions | Errors and Omissions Insurance | Malpractice Insurance | Professional Liability Insurance | Small Business | Small Business Risk Management

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