Errors and Omissions Insurance Washington State: A Guide for Small Business Owners

As a small business owner in Washington State, you're likely aware of the importance of protecting your business from potential lawsuits and financial losses. Errors and omissions insurance, also known as professional liability insurance, is a must-have for many industries.

In Washington State, errors and omissions insurance is not mandatory, but it's highly recommended for professionals who provide advice or services to clients. This type of insurance can help cover the costs of defending a lawsuit and paying damages if you're found liable.

If you're in a high-risk profession, such as a lawyer or accountant, you may be required to carry errors and omissions insurance by your clients or by law. For example, the Washington State Bar Association requires lawyers to carry malpractice insurance, which includes errors and omissions coverage.

In Washington State, the cost of errors and omissions insurance varies depending on the industry, policy limits, and other factors.

Errors and omissions insurance is designed to cover the costs associated with claims of negligence, mistakes, or incomplete work. This type of insurance is especially valuable for freelancers, consultants, and small business owners who provide specialized services.

It helps protect your reputation and finances by covering legal defense costs, settlements, or judgments related to professional errors. This is particularly important for professionals who offer high-risk services, such as contractors or lawyers.

Here are the types of professionals who can benefit from errors and omissions insurance:

Errors and omissions insurance, also known as professional liability insurance, is a type of insurance that protects professionals from financial losses due to mistakes or negligence in their work.

The most obvious companies that need errors and omissions insurance are those that provide professional advice and services, such as lawyers, accountants, insurance agents, and real estate agents.

General liability insurance, on the other hand, covers damages to third-party property, but it doesn't cover faulty workmanship or damages to your own work.

Factors that influence business insurance costs include your industry and risks, business operations, number of employees, location, policy limits, and deductibles.

Here are some average costs for small business insurance in Washington state:

Without errors and omissions insurance, even a small mistake could lead to a lawsuit, jeopardizing your financial security and client trust.

As with most insurance policies, an E&O insurance policy does not cover events you knew of prior to taking out the policy, so it's essential to be honest and transparent when applying for coverage.

A Business Owner's Policy (BOP) is a great option for small business owners in Washington, as it bundles commercial property insurance and general liability coverage in one plan, making it often the most cost-effective business insurance policy.

General liability coverage is essential for protecting your business from slip-and-fall injuries, damaged customer property, and damaged business property.

A BOP can provide peace of mind and financial protection for your business, but it's essential to understand that factors such as your industry and risks, business operations, and number of employees can influence the cost of your BOP.

The cost of a BOP in Washington can range from $63 per month, on average, which is a relatively affordable option for small business owners.

Here's a comparison of the average costs of different business insurance policies in Washington:

Any Artisan Contractors Insurance that regularly installs work in or around clients' property should obtain a Contractors E&O Insurance policy. Most GL Liability policies now state that faulty workmanship and defective construction are not an occurrence under the terms of the policy. As a result, you won't have any coverage under your general liability policy.

In Washington State, many types of businesses could benefit from having Errors and Omissions insurance. A policy may even be mandatory to work in specific fields or hold certain professional licenses. For example, accountants, real estate agents, and consultants often consider E&O insurance to protect themselves against errors and omissions.

Some examples of businesses that often consider E&O insurance include:

If you're an artisan contractor who regularly installs work in or around clients' property, you should consider getting a Contractors E&O Insurance policy. Most GL Liability policies now exclude faulty workmanship and defective construction, leaving you without coverage under your general liability policy.

Artisan contractors who install work in or around clients' property should be aware that faulty workmanship and defective construction are not typically covered by general liability policies. This means you'll be left paying out of pocket for repairs or replacement of your work if something goes wrong.

You may think your general liability policy has got you covered, but it's likely that faulty workmanship is excluded. Even if it's not, there are usually exclusions that can leave you with coverage gaps.

If you're running a business in Washington, you might be wondering who needs Errors and Omissions insurance. Many types of businesses could benefit from having this type of insurance.

Accountants, for instance, often consider E&O insurance to protect themselves from lawsuits related to financial mistakes or errors. Real estate agents and realtors also need this type of insurance, as it can help cover losses due to missed deadlines or property damage.

Home health aides may be required to have E&O insurance to work in Washington, especially if they're providing medical services to patients in their homes. Notaries, meanwhile, often need this type of insurance to cover themselves against lawsuits related to mistakes made while notarizing documents.

Consultants can also benefit from E&O insurance, as it can help protect them from financial losses due to errors or omissions in their consulting work.

Here are some examples of businesses and occupations that often consider E&O insurance in Washington:

Errors and omissions insurance in Washington State is designed to cover the costs associated with claims of negligence, mistakes, or incomplete work.

This type of insurance helps protect your reputation and finances by covering legal defense costs, settlements, or judgments related to professional errors.

Professional services or advice are covered under this policy, which includes work mistakes and oversights, professional negligence lawsuits, late or incomplete work, errors, mistakes, and omissions, undelivered services, missed deadlines, negligence, and breach of contract.

An E&O policy typically pays your legal defense expenses, such as attorney's fees and court costs, when a covered claim is made. It may also pay legal settlements and court-ordered judgments to injured parties.

Here are some specific events that would trigger coverage under an E&O policy:

Your E&O insurance covers you whether you are at fault or not, helping prevent baseless claims from ruining your small business.

When you're considering errors and omissions insurance in Washington State, it's essential to understand what's not covered. E&O insurance specifically excludes liability for bodily injury and property damage, which are already covered by your general liability insurance policy.

This means that if you're sued for damaging someone's property or causing an injury, your E&O insurance won't be able to help.

A contractors E&O insurance policy specifically excludes liability for four types of claims: bodily injury, property damage, personal injury, and advertising injury. These are all covered by your general liability insurance.

Here are the exclusions listed out for clarity:

E&O insurance also doesn't cover general business risks like theft or property damage. It's only designed to cover specific claims related to errors or omissions in your professional services.