Why Clients Want You to Have an Errors and Omissions Policy
Most clients want you to have an Errors and Omissions Insurance policy because it makes your business safer for them to work with. By covering claims over incomplete or unprofessional work, an E&O Insurance policy shows clients that you’re able to make things right if something goes wrong.
In some ways, E and O Insurance is like those late-night infomercials with the whooshing graphics proclaiming, “Satisfaction guaranteed or your money back!”
For retailers, product warranties and money-back guarantees act as a selling point and safety net for customers. If they’re not completely satisfied, they can return the product and get a refund.
Errors and Omissions Insurance policies can provide a similar guarantee of protection for your clients. Your customers want professional services they can count on. If they’re dissatisfied with your work or something goes wrong, they can recoup their losses through your policy.
Let’s examine why it’s worth investing in an Errors and Omissions Insurance – not only to cover your risk exposure, but also to reassure skeptical clients.
How an E&O Insurance Policy Helps Clients Trust You
While reviewing their options for professional service providers, clients are most likely to choose a business with a track record of quality work and exemplary skills. But how do you show clients you have those traits?
An Errors & Omissions Insurance policy acts as a kind of guarantee for your customers. Once you show your clients your certificate of insurance, they know you have the financial means to back up your professional work. That insulates your client from the cost of your…
Say you’re a marketing consultant. A client hires you to develop an email campaign to nurture the thousands of prospects they have in their system. You plan everything and explain when they should hit send – but they ignore your advice and send over a holiday weekend. The results are terrible and the client sues you for the fee they paid, insisting your bad advice cost them money.
In that instance, your Errors and Omissions policy could pay for the cost of defending yourself, as well as any settlement or judgment you're found liable for.
Wondering when your policy will actually come into play? Check out "3 Real Cases Where E&O Insurance Saved the Day."
Credibility-Building Tips that Win Over Clients
In a very tangible way, an Errors & Omissions Insurance policy can act as a financial safety net when something goes awry with your work. But there's also the fact that your policy can help distinguish your business from the competition by building credibility. Errors and Omissions Insurance demonstrates to clients that you have their long-term interests at heart and that you take your work seriously.
Here are some other ways can you encourage new customers to use and recommend your services:
- Communicate effectively. Clients appreciate updates on your progress. Don’t brush aside their concerns, and answer their questions in a timely manner. Document all your communication for later reference.
- Use client contracts. Write up a contract that clearly outlines what you will and won't do. Include work deadlines, define expectations, and agree on compensation. A written agreement can help settle disputes that crop up.
- Be open and honest. The Golden Rule applies here: "Treat others as you would like to be treated." Learn to trust your clients, and they’ll likely return the favor.
For more pointers, read "What Is E&O Insurance Coverage?"