Errors & Omissions Insurance for Mechanics, Contractors & Manufacturers

Posted in General, Business

Mechanics, contractors and manufacturers strive to meet their customers’ needs through exceptional workmanship, in a professional and timely manner. However, there are times when things can go wrong on a project. Installing the wrong product, using a faulty design or using defective materials are all examples of mishaps, which could force a client to file a claim or sue.

Errors & Omissions (E&O) insurance can help these businesses manage the financial risks associated with faulty workmanship claims. It provides extra protection by covering damages that arise from a business’s negligent act, error or omission, or from defective parts or improper installation.

Consider the following scenario:
A machine shop is fabricating a part for a customer with a tight contract deadline. After the customer receives the parts and starts installing them, they realize the parts are not to their exact specifications and cannot be used. The machine shop may incur significant expense in the cost of labor and materials to redo the work. If the machine shop has E&O and is found liable for the loss, this error may be covered.

Mechanics, contractors and manufacturers should consider implementing a risk management program to help prevent losses from occurring and disrupting their day-to-day operations. Some insurance carriers (including Integrity Insurance) offer trained loss control specialists who work with a company to identify hazards and loss exposures in their building, operations and fleet, and provide recommendations for controlling those expenses.

Most E&O policies cover judgements, settlements and defense costs.1 To learn more about E&O and find the coverage that fits your business’s needs, reach out to your Independent Agent today.

Disclaimer: E&O policies are underwritten by Integrity Insurance, Appleton, WI, and are subject to underwriting approval. Not available in all states. This article is for information purposes only. For specific coverage details, always refer to your policy.

Source:
1 insurancejournal.com


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