9 Things That Help a Small Business Less Than Errors and Omissions Insurance
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9 Things You Need Less than Errors and Omissions Insurance

When your small business takes off, what's the best way to use your profits? If you look at the example swanky startups set, you may be tempted to blow your new earnings on fancy espresso machines, in-office water slides, and lavish parties.

While these extras can be fun, it's probably not the wisest way to spend your hard-earned money this early on. In fact, those dollars are much better spent on commercial insurance.

To drive that point home, here are nine things your small business probably needs less than Errors & Omissions Insurance.

  1. Birthday lunches. You want to show appreciation for your employees with special lunches on their birthday for the entire office. Depending on how many employees you have, this can quickly get expensive. Instead of draining your wallet, send around a card for everyone to sign or have a quarterly celebration for multiple birthdays.
  2. Funky lighting effects. Maybe you’re trying to create a specific mood for your office through unique lighting. However, custom lighting doesn't come cheap. Explore alternatives to cruel fluorescent bulbs without breaking your bank.
  3. Treadmill desks. Instead of sitting idly at a desk all day, your employees can be walking while working on a treadmill. There are health benefits to constant movement, but these desks increase the risk of workplace injuries.
  4. Tropical fish tank. A large tropical fish tank makes a stunning aquatic centerpiece, but it’s also expensive to clean and maintain. Plus, clients won’t want to see a dead fishy floating on its back.
  5. A weathervane. A custom weathervane can be a unique design element for your small business. There’s a vintage charm, but at the end of the day, do your customers really care about which way the wind is blowing?
  6. Frozen yogurt dispenser. Sundaes at your fingertips are a sweet treat, but an unnecessary (and unhealthy) addition to your amenities.
  7. Office happy hour. Social outings build camaraderie and strong working relationships, so it might make sense to provide alcohol to employees to unwind at the end of the day. But drinking at work functions is costly and opens your small business to liquor liabilities.
  8. Season sports tickets. Whether to impress clients or reward employees, season tickets to your local team’s games is a high-priced luxury. Until you’re more financially stable, stick to a single company outing or less expensive venues.
  9. Office mascot. Maybe your small business brand is represented by a friendly bear, so you want a full bear costume for company events and promotions. High-quality mascot costumes can cost thousands of dollars. Stick with a scaled-down teddy bear for now.

How to Practice Smart Spending

Any business that offers professional services should have adequate E & O coverage. E&O Insurance (also known as "Malpractice Insurance" or "Professional Liability Insurance") is a necessary safeguard against those unpredictable bad days – days where an employee loses focus and makes an oversight or a client misunderstands the terms of your service.

Very simple and common occurrences can lead to disastrous lawsuits, such as…

  • Typos. A transposed digit on an order form or the wrong meeting location in your calendar can cause your clients to miss crucial deadlines or opportunities to make money. In turn, you could be on the hook for their financial losses.
  • Advice. If a client depends on your professional recommendations and your advice doesn't bode well for them, they could sue – regardless of the actual quality of your services.
  • Miscommunication. Whatever your business, your clients expect results. If the results your client expected were different than the ones you intended to deliver, the misunderstanding could land you in court over their real or perceived losses.

There are myriad situations that can lead to services-based lawsuits against your company. Be sure to check out "What Does an Errors and Omissions Lawsuit Look Like?" for some real-world cases.

E&O Insurance: Further Reading

E&O Insurance in the Insureon Blog