Why the need for Errors and Omissions

For some people, the question of why professional liability insurance is needed comes up over and over again. Individuals who operate small businesses from their homes, or on the side, may feel that they do not get involved in projects large (a.k.a. hazardous) enough to worry about insurance. Or they may feel that the services that they provide don’t present any exposure for lawsuits.
 
The truth is that any individual (or business entity) that provides advice for a fee is liable for the soundness of that advice. If a client follows your advice, and something goes awry, you can bet that they will blame you for it. Likewise, as a professional, you are obligated to provide complete advice to your clients. Neglecting a detail that later turns out to be an important one can, and likely will, result in a lawsuit against you.
 
Like it or not, the need for professionals to carry liability insurance of this nature is very real. If there was not an exposure for loss, then the idea to create a coverage to protect against it would have never occurred. House insurance was created because families lost their homes to fires and were left financially devastated. Auto insurance was created because people were getting into accidents and not only wrecking their cars, but hurting themselves and others, sometimes severely, in the process. Liability insurance was created because professionals give advice, and sometimes that advice, however well intended, leads to a financial loss on the part of their clients. When a client, who has paid you and relied on your expertise, suffers financial loss directly or indirectly as a result of your service, they can sue you in order to recoup their losses.
 
While most people are fortunate enough not to be sued in relation to their services, those that have been know that the lawsuits can be large and financially devastating if you don’t have adequate insurance to back you. While every professional will not get sued, keep in mind that not every house will burn down and not every driver will hit a pedestrian. Insurance is intended for the "what if" scenarios. What if the unthinkable happens, and it happens to you?
 
Below are some examples of situations that could give rise to a lawsuit against interior designers:

1. Interior designer provided incorrect material specifications to the client

   i.e. the material provided is inappropriate for the intended use

2. Negligent specification of flooring.

   i.e. slip resistance ratings were not sufficient to prevent potential injury.

3. Error in design drawing of office space
   i.e. error in dimensions for design and construction of office space, resulting in space that cannot be utilized for intended purposes, or existing furniture that cannot be re-used within the space.

4. Non-compliance with building code
   i.e. non-compliant slope of interior ramp intended for barrier-free use, resulting in injury to office worker.

5. Error in noting dimensions in construction or millwork drawings
   i.e.wrong size of shelving or furniture for office being ordered and installed.

6. Error in designing and detailing custom shelving unit or fixtures
   i.e.unit or fixtures are not designed to be sufficiently structurally sound for intended purpose.

7. Referral of contractors
   i.e. you may be named as a third party in a lawsuit involving a dissatisfied client who is suing a contractor referred by the interior designer.

8. Error in design that results in non-compliance of fire safety codes.
   i.e. a gym, night club or other public venue is scheduled to open on a given date, but a flaw in design (e.g, improper fire exits locations) causes a delay in the grand opening. The result to the client will be lost revenue and marketing efforts.