Errors and omissions insurance for independent contractors

Errors and omissions insurance, also called professional liability insurance, provides crucial protection for independent contractors who make a living off their expertise. You might need a professional liability policy because:

Errors and omissions insurance covers the cost of lawsuits related to work mistakes, including:

• Failure to deliver promised services
• Negligence in providing professional services
• Incorrect or incomplete work
• Errors and oversights

Independent contractors aren't immune to making these kinds of mistakes, and you could still be sued even if you're not at fault. Even the most careful professional might have to muster a legal defense for a frivolous lawsuit, which is also covered by an errors and omissions policy.

Independent contractors can be held liable for mistakes that negatively impact their clients or the businesses they work for.

For example, say an IT consultant hired by a larger company recommends a much-hyped software as a service (SaaS) to one of its clients. Unfortunately, the recommended SaaS doesn't have a reliable backup feature and the client ends up losing valuable data. The client files a professional negligence lawsuit against the company and the consultant, too.

In a situation like this, contractors should have the insurance protection necessary to pay for their legal costs, including any settlements or judgments rewarded to the client. This lessens the burden on the businesses you work with, and could make you the preferred choice over an uninsured contractor.

Errors and omissions insurance and other liability policies often don't cover mistakes or accidents involving independent contractors or subcontractors working for your business. To protect yourself from lawsuits, you may want to require contractors to carry coverage.

Other policies, such as a commercial general liability policy, may let you add contractors to your policy as an additional insured, but that's not the case for errors and omissions coverage.

Complete Insureon’s easy online application today to compare errors and omissions insurance quotes from top-rated U.S. insurance providers. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.