Litigation Problems Involving Negligence

Companies or professionals who want protection from claims or assertions of negligence in the administration of contractual duties should purchase an errors and omissions (E&O) policy. The financial loss that can accompany successfully litigated E&O claims can devastate any company, and reputational damage is equally destructive. As noted by the experts at Transparity Insurance Services, a small business or professional working in a self-employed capacity have the greatest risk of financial detriment.

Common Claim Areas

There are few areas that present the greatest liability when dealing with the potential for claims or allegations of negligence of duty. These generally include:

  1. Inadequate or Insufficient Documentation or Communication
  2. Failing to Represent or Present Information Accurately
  3. Misleading Clients on Professional Qualifications
  4. Breach of Contract or Duty

Because many of these areas can take a subjective approach based on the claims of a client, one of the best ways to protect against long-term loss and damage is through a comprehensive E&O policy. This can help with the financial need for securing legal counsel, paying legal fees, or paying settlement amounts in the event a lawsuit is brought against an individual or company. Some policies also include reputation management consultation and lost pay due to court appearance requirements. Carefully documenting client interactions and decision-making is another to help establish a strong defense if litigation is ever pursued.