Let’s say that hackers break into a company that hosts servers used by third parties to store data. They gain access to client data and proprietary information.
The organizations impacted by the hack then, at that point, sue the server-facilitating organization for harms for lacking security.
The server-hosting company examines its E&O insurance policy to determine what it covers and does not.
The company benefits from a robust and comprehensive errors and omissions policy. The legal fees associated with the case against multiple businesses are covered by the insurance company.
Additionally, it covers any monetary damages awarded by the courts or settled through arbitration.
Depending on the company’s finances, having coverage for errors and omissions helps the company avoid a significant financial hit, possibly even bankruptcy.
E&O insurance might be something you should think about if you or your employees are in the business of providing expert advice or other professional services.
