What is E&O? | Vouch Insurance

When

When should startups get Errors & Omissions insurance?

As soon as you’ve launched your products or services to the public, you’re exposed to the kinds of lawsuits that E&O can help cover.

If you’re pursuing funding, having an Errors & Omissions policy in place helps show potential investors that you understand the risks you face and you’ve taken steps to mitigate them. It also means that if your startup is sued over its professional work, your investors’ money won’t go to covering legal costs. A win-win!

When you get your E&O through Vouch, you’ll be able to apply in just 10 minutes and be covered within 24 hours.

Need coverage fast?
‍Apply today, and you could have a policy within 24 hours.

Why

Why get Errors & Omissions insurance?

THE LOGIC

Tech startups tend to have higher E&O exposure than those in other industries. Why? Because technology innovation moves much faster than the laws that regulate it – especially when it comes to startups. As a result, it’s not always clear who’s liable when things go wrong.

COMMON REASONS

Another consideration: while nearly everybody today uses advanced technology in their daily lives, most people outside the tech industry don’t understand it. This can lead to miscommunication about what your services are, what you’re responsible for, and what customers can expect to get.

The combination of limited laws and less-than-perfect communication can lead to lawsuits. If you’re sued over your professional work, your E&O policy can help cover your legal costs.
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What might those costs look like? Here are a few data points to give you an idea.

KEY STAT

The average penalty in an E&O lawsuit is more than $140,000 – not counting your legal costs (and, again, time away from the office).

Costs associated with E&O claims against your startup

What

What does Errors & Omissions insurance typically cover?

COMMONLY DOES COVER

E&O insurance is designed to cover costs associated with legal claims that your professional work caused a financial loss for a customer or client. Coverage typically includes payment of legal fees and payment of any settlement or judgment against your startup, should it be found liable.

Breach of warranty

CLAIM EXAMPLE

Someone at your startup promises something to a customer or client in a warranty and you’re unable to keep that promise. Your client sues.

Negligence

CLAIM EXAMPLE

Someone at your startup fails to use reasonable care, which results in financial damage to a person or entity. They sue.

Misrepresentation

CLAIM EXAMPLE

Someone at your startup makes a false statement or claim in order to entice another party into agreeing to the terms of a contract.

When you get your policy through Vouch, you can choose coverage limits that make sense for your exposures. This ensures you don’t pay for more coverage than you need – or get stuck in the lurch with an insufficient policy.

COMMONLY DOESN'T COVER

E&O is important, but its protection is limited to claims relating to the delivery of your professional services or product.
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It’s important to note that E&O does NOT cover…

Data breach claims: In most cases, claims alleging your startup enabled or failed to prevent a cyber event like hacking are covered by a separate policy: Cyber insurance.
Employee injury costs: These are typically covered by Workers’ Comp.
Property damage: Damage to your laptops and other property that belongs to your startup (aka first-person property damage) is covered by a Business Property policy, usually included with a BOP.
Third-party injury claims: If a visitor gets hurt while visiting your workplace, damages may be covered by General Liability, also usually included in a BOP.
D&O claims: Claims against your directors and officers are excluded from the E&O policy. For these, you’ll need a Directors and Officers (“D&O”) policy.

Ready for some peace of mind? Apply for your Errors & Omissions policy.

Why Vouch

Why get Errors & Omissions from Vouch Insurance?

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If you’re looking for E&O, you’ve got choices.

But if you’re a tech startup interested in paying for only the coverage you need – nothing more, nothing less – you’ll have a hard time finding policies better than what we’re offering.
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That’s because Vouch’s founders, Sam and Travis, started the company specifically to improve the insurance landscape for startup founders.

They’re both founders themselves (obviously), and they both have experience in the fintech world. They’re familiar with the headache that comes from trying to understand which policies to stitch together to cover a startup’s risks – and the frustration that comes from knowing you’re being forced to pay for coverage you don’t need.