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How many of you carry E & O Insurance?

by JKinakin
10 replies
I have a client who wants to know if we have errors and omissions insurance.
I don't have it as it is just another expense I'll have to deal with even though
it could save my butt in the future.

Have some of you decided not to get insurance?

Those that have insurance, can you recommend a great insurer that has a
reasonably priced plan?

I don't see this talked about very much, even though it is very important
#carry #insurance
  • Profile picture of the author webdave
    As far as I know this is something that is required if are an insurance agent selling health and life insurance . This is to protect you and the insurance company that you are writing (selling) insurance for in case you make an error when you are writing up a policy for a customer. Insurance companies require that you have this insurance before they take you on as an agent. I also believe that some of these E&O companies are affiliated with insurance companies and will then offer discounts if you become an agent for them. I hope this helps. Can I ask what the circumstances are surrounding this request from a client?
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    • Profile picture of the author fitz10
      Originally Posted by webdave View Post

      As far as I know this is something that is required if are an insurance agent selling health and life insurance . This is to protect you and the insurance company that you are writing (selling) insurance for in case you make an error when you are writing up a policy for a customer. Insurance companies require that you have this insurance before they take you on as an agent. I also believe that some of these E&O companies are affiliated with insurance companies and will then offer discounts if you become an agent for them. I hope this helps. Can I ask what the circumstances are surrounding this request from a client?
      That's one use of E & O insurance, but I believe in this case the OP was talking about E&O to cover against mistakes made in his consulting business.

      IMHO, insurance is crucial. You probably won't make a mistake, but if you do and it hurts your client's business somehow, you'll be covered. Hiscox offers E&O starting at $20 month: Errors and Omissions Insurance - E & O Insurance for Small Business | Hiscox USA. I'm sure other people can give you other recommendations.

      Don't forget it is a deductible expense on your taxes.
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  • Profile picture of the author KabanaSoft
    It all depends on the type of work that you are doing and what the potential cost of a mistake on your end may be.

    When i was working as a software engineer for a company that sold high precision motion control machines that costed 100K to 1mil+, it was necessary...because if i crashed one of these machines, they cost to repair could be in the 100's of thousands of dollars not to mention the downtime of the factory that couldn't produce parts anymore...

    For risky work, its necessary, but it is pricey...i've been quoted anywhere between $1250 and $3500 for E & O insurance.

    If you are just doing SEO work and consulting to local business' than its not necessary...what's the worst a business can sue you for? That you didn't live up to your end getting their website ranked higher? You hurt their reputation? Can they prove this? Are they willing and have the money to take you to court? Chances are the answer is no...

    You can get a general business insurance policy for $250 a year, and that should cover most of the insurance you will need (as long as you aren't doing risky work).
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    • Profile picture of the author fitz10
      Originally Posted by KabanaSoft View Post


      If you are just doing SEO work and consulting to local business' than its not necessary...what's the worst a business can sue you for? That you didn't live up to your end getting their website ranked higher? You hurt their reputation? Can they prove this? Are they willing and have the money to take you to court? Chances are the answer is no...

      You can get a general business insurance policy for $250 a year, and that should cover most of the insurance you will need (as long as you aren't doing risky work).
      Unfortunately we live in a very litigious society. Parents sue teachers for giving their kids bad grades (not even joking), a business could sue you and have a much better case than that. If they suffer a business loss due to a mistake you make you could be in very big trouble. What if you somehow get them banned from Google (wouldn't be shocking given some of the methods promoted on here)? What if you put the wrong phone number on all their promotional materials and no one calls them? There's many things that can go wrong. Hopefully a business owners would take it in stride, but you never know.

      Plus, every once in awhile you will inevitably run across a business who requires you to have insurance.

      In my mind, peace of mind is worth a couple $100 bucks.
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  • Profile picture of the author JKinakin
    My client has an organization of doctors who specialize
    in a certain field and they mentioned that the insurance
    was to protect sensitive information. This was her quote
    in an email to us.

    "The insurance policies I was referencing are not for loss of information, but instead for liability purposes, since we have sensitive member information on the website. Does Jack have an E&O policy including cyber liability for identity theft? "

    I guess this goes beyond just image property claims and errors in spelling and/or
    addresses.

    I've been at this project so long with so many changes, that the original contract
    money has run out.
    Damn I hate working for $0.42 and hour. LOL
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  • Profile picture of the author danielkanuck
    Errors and omissions insurance? What in the world is that?
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    • Profile picture of the author KabanaSoft
      Originally Posted by fitz10 View Post

      Unfortunately we live in a very litigious society. Parents sue teachers for giving their kids bad grades (not even joking), a business could sue you and have a much better case than that. If they suffer a business loss due to a mistake you make you could be in very big trouble. What if you somehow get them banned from Google (wouldn't be shocking given some of the methods promoted on here)? What if you put the wrong phone number on all their promotional materials and no one calls them? There's many things that can go wrong. Hopefully a business owners would take it in stride, but you never know.

      Plus, every once in awhile you will inevitably run across a business who requires you to have insurance.

      In my mind, peace of mind is worth a couple $100 bucks.
      True but honestly SEO work is not risky at all compared to other occupations...worst case you get a business blacklisted, and if your smart, this should never happen... if it does, go out of business and start a new llc if they sue you...cheaper than paying for E&O insurance yearly (btw i highly doubt you can get E&O for $20/month, my quotes were much much higher from a reputable agency).

      And thats not nearly as bad as if say a doctor screwed up a surgery and someones life is on the line. Or if i were to wreck one of those machines i used to work on and the factory couldn't produce $10 million in daily product output in because the production line was down due to my mistake.

      You have to look at it as cost vs. possible need for this coverage. E&O is pricey insurance..and is for those who do risky work. I just couldn't fathom spending that kind of money for the .00001% chance that i may screw up someones website.
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  • Profile picture of the author marciayudkin
    I have been in two client situations where the standard contract I was asked to sign included a provision that I had E & O Insurance of a certain amount. I told my contact at the organization (who very much wanted to hire me for the consulting gig) that I didn't have E & O Insurance and it was prohibitively expensive for me.

    In one case, the contact arranged to get that requirement dropped from the contract, and in another case the contact arranged to get me covered through the company's own policy. I believe a third option would be for them to increase the amount of the contract by the cost of the insurance.

    To get this kind of result, you have to be willing to walk away from the opportunity if they don't cave in. I was.

    Marcia Yudkin
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    Check out Marcia Yudkin's No-Hype Marketing Academy for courses on copywriting, publicity, infomarketing, marketing plans, naming, and branding - not to mention the popular "Marketing for Introverts" course.
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    • Profile picture of the author qu4rk
      I just got quoted $1100 from my local guy. I'm not even sure what it covers. I will have to ask him more about the policy he's offering.

      Is E&O insurance really necessary? Better yet, has anyone run into a situation where this was an issue?
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  • Profile picture of the author chg
    I have yet to hear of anybody needing to actually use E&O insurance to cover any claims in regards to SEO?

    However, I'd go the route of Marcia if I didn't have any. I've raised pricing on contracts before due to unexpected costs that came about during contract negotiation. It's expected and if you don't open your mouth, you're the one losing out.
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