Starting a business of their own is a dream for many Americans. It provides them with a sense of freedom and fulfillment and the small businesses they start help their communities flourish.
However, with any new business, chances are that finances are tight. It takes a little stretching of the budget to make ends meet, at least for the first year or so. This means that many businesses might forgo getting errors and omissions insurance to protect themselves, their employees, and most importantly, their business from falling prey to lawsuits over small mistakes that can easily happen.
As with any business decision, it is important to weigh the risks and rewards that might come as a result of that decision. In the case of errors and omissions insurance, the only real downfall is the fact that it is one more bill to pay, one more blow to the profit margins. However, the advantages of getting this type of insurance are numerous.
For instance, if there is ever a mistake made with wording on a website or in an advertisement that is seen as misleading to a customer, then errors and omissions insurance is a way to protect the business from any subsequent lawsuits that come about as a result of this error. In addition to this, most times, policies can also be catered to a specific company’s or industry’s needs in order to provide the widest coverage for that company.
Likewise, this type of insurance policy can also potentially cover any contractors that are not affiliated with the company as well as any other temporary staff that a company hires. This allows a business owner to insure that any errors or omissions made by anyone working for the company are protected and unable to completely derail the company financially.
While the cost might seem like something that a small business owner cannot possibly spare, especially for something that it may or may not need to actually use, it is just as necessary as any other type of insurance that a business owner would need.
It is especially important for small businesses to look into errors and omissions insurance because it would be harder for them to bounce back from a financially debilitating lawsuit then for a much larger company, meaning that cities could start to lose the small businesses and entrepreneurs that are a breath of fresh air in the chain-centric U.S. market.