Data breaches and other mishaps can lead to lawsuits that can topple a business that lacks proper insurance. It’s important for certain companies to purchase professional liability insurance and errors and omissions insurance in Houston, TX. Here are reasons to buy professional liability insurance in Houston, TX
Who Is at Risk for a Technology Errors and Omissions Claim?
Technology companies have a higher risk of being sued since countless businesses rely on them for digital infrastructure. Information technology (IT) firms that oversee a company’s electronic networking and digital assets can face immense litigation if they do not live up to the promises of their service agreements with clients.
Businesses also rely on the communication services of telecom companies and the software development of e-commerce solutions. Management in any of these industries can make bad decisions that may lead to major losses for their clients. Any business that stores confidential data in a database has these same risks and can face errors and omissions (E&O) claims.
What Kind of Lawsuits Are Typically Covered by Tech E&O Insurance?
E&O coverage is part of professional liability insurance that protects businesses from the following type of complaints:
- Cybersecurity breaches that compromise client data
- Breach of contract such as missing a deadline
- False warranty claims
- Misrepresenting business promises to secure a contract
- Negligence due to lack of proper oversight
- Disputes involving the scope of a project
- Employee errors such as clicking an infected email
- Infringement of another entity’s intellectual property
- Using unlicensed software
Strategies That Will Protect Your Business Most Against E&O Claims
There are steps your business can take to avoid E&O claims in the first place. Even though your business will be covered for these claims with the right liability insurance, it’s still important to limit the number of claims you file or face from others. It is therefore advantageous to implement the following strategies to protect against E&O claims:
Optimize email communication
Don’t take your email system for granted since it can be where malware is unleashed. Use spam filters to weed out useless emails but respond promptly to prioritized emails. Let the client know you care about their immediate concerns.
Run cybersecurity tests
No cybersecurity system is bulletproof, so at least make sure it’s working properly. Run periodic tests of files and applications to detect any security flaws. Outsourcing to IT experts is a helpful solution for reliably running these tests.
Use clear communication instead of jargon
Avoid industry jargon, which can confuse clients or cause them to be suspicious for not being clear. Understanding clear language is better than worrying about what the client thinks.
Make client contracts fair and easy to understand
If you want to sustain a business with loyal clients, be straight with them. Avoid using hidden or deceptive tricks to extract as much money out of them as possible. Aim for customer satisfaction and more inclusive growth. empty
Offer training for new hires
You can reduce errors made by new employees by giving them thorough training on their job tasks and responsibilities. Make sure they understand company policy and how to use digital tools properly.
How Errors and Omissions Liability Insurance Can Financially Safeguard Your Business
Another reason to get E&O insurance is to protect your business from lawsuits over the quality of your work. Some clients may be looking for ways to sue your company or get out of paying for something. Thus, irrespective of whether your firm is at fault, E&O coverage will pay the legal costs. However, cyber liability coverage may be necessary if the issue involves a data breach.
E&O Policy Vs. Cyber Liability
Differences exist between E&O and cyber liability policies. While E&O protects against negligence, cyber liability protects against data breaches. For certain businesses, it’s best to carry both insurance types. Connect our insurance professionals at J. Archer Insurance Group to learn how you can get the proper coverage for your operations. Contact us today to schedule your consultation!