The importance of Errors and Omissions insurance for online marketing agencies
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Posted On :
Jan-25-2011
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Article Word Count :
716
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Errors and Omissions (Professional Liability) insurance is important for all businesses in all sectors, as it helps minimize disruption caused by a law suit as well as protecting the finances and reputation of the business. Here are some of the reasons why it is important for online marketing agencies.
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Online marketing agencies operate in a dynamic and fast-paced environment and face an array of challenges, not least anticipating and understanding their clients’ requirements.
However, whilst agencies tend to dedicate a variety of resources to fulfil their clients’ needs, they often do not consider the challenges that could be presented should a dispute with a client arise.
Even with the best interests at heart and thorough procedures in place, a simple mistake or misunderstanding can occur, leaving the business vulnerable should a client make a claim alleging negligence.
In fact, many disputes occur even when a mistake has not been made, whether this is due to the client not fully understanding and appreciating online marketing practices, or simply because the client is trying to avoid payment.
It only takes a dispute with one client to impact the entire business.
The coverage provided by an Errors and Omissions (Professional Liability) insurance policy helps minimize disruption caused by a law suit as well as protecting the finances and reputation of the business.
Key challenges and reasons for E&O insurance include:
One of the key areas for dispute arises from a lack of communication and planning between the agency and the client.
Investing time and effort in the early stages of the project by clearly outlining expectations and responsibilities can help ensure that both parties have mutually aligned objectives.
This is especially important given the fact that a client may not fully understand the principles and practices associated with online marketing.
Therefore time should be allocated to brief the client and outline the key steps involved within their project.
In addition, clearly documenting all agreements and changes in a contract and other written documentation can ensure that should any problems arise they can easily be referred back to.
There is also an extensive amount of planning that must be undertaken by the agency internally, making communication between the various departments fundamental in ensuring that the client is provided with the most accurate project plan.
Underestimating timings or challenges posed by the various stages of the project, or not calculating an accurate budget can all result in client dissatisfaction and ultimately escalate into a client dispute.
The actions of an individual employee can also result in client dissatisfaction. Whether an employee has deliberately under-delivered or failed to complete their tasks as promised, the agency as a whole can and will be held accountable.
Agencies also find themselves at risk from client disputes even when a mistake has not been made.
For example, a project can be delayed if the client does not give adequate sign off. However, the client may believe the agency was not persistent enough in asking them for the sign off and so despite the agency’s best intentions the client may perceive the agency to be at fault.
Failure can also arise due to circumstances entirely outside the agency’s control, for example a blogger may have inappropriately edited some content or it may take longer than anticipated for a website to list the submission made by the agency.
This is also true if the agency recommends a partner company for other marketing related work, which fails to deliver.
Despite it being the partner company’s fault the first agency can also be sued.
The actions of third parties can still impact the relationship an agency has with its clients
Summary:
It can be hard to plan for all eventualities, and even the most thorough preparation may not prevent a (perceived) error.
Errors and Omissions insurance helps protect online marketing agencies in these circumstances. It pays for a mistake to be fixed or covers the legal costs of the marketing agency defending themselves (and the costs of any damages they may have to pay), even if the accusations are unfounded.
As a service provider, an online marketing agency depends on its client relations and business reputation; making it crucial to have appropriate measures in place should something go wrong.
Having E&O insurance in place will ensure the claim is defended with expert legal advice, pay damages if necessary and minimise the time spent on the claim by key staff.
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Article Source :
http://www.articleseen.com/Article_The importance of Errors and Omissions insurance for online marketing agencies_50027.aspx
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Author Resource :
Article submitted by Theresa Reardon, Managing Producer at InsuranceBee Inc. InsuranceBee Inc is the first company in the US to enable professionals to obtain affordable, Professional Liability Insurance (E&O insurance) quotes in real-time online.
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Keywords :
professional insurance, professional liability, insurance professional liability, professional liability insurance, errors om,
Category :
Finance
:
Insurance
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