Errors and omissions (E&O) disclaimers

Disclaimers tell your clients or customers that they must assume the risks of following your professional advice, or using your products or services. They are intended to relieve you of liability, and in certain situations, disclaimers can shield your business from client lawsuits.

When used correctly, an errors and omissions disclaimer can help protect your business from costly errors and omissions lawsuits. This type of disclaimer is typically designed to reduce your business’s legal liability for a specific professional risk, like cost overrun, missed deadlines, or inaccuracies.

An E&O disclaimer might be located on your company's web pages, in a client contract, or in an email.

Let's say your business has a company blog that outlines some of the ways clients can use your products or services. Because the blog doesn't include instructions and only provides a limited look at what you do, you might add the disclaimer: “The information provided in this blog is ‘as is’ with no guarantee of accuracy or completeness.”

Or, for instance, your business might be discussing a project budget with a client over email, but can only provide cost estimates at this point. To prevent lawsuits over a potential cost overrun, you might include the disclaimer: “These numbers are only preliminary estimates. Actual costs could be higher.”

Another example would be if your business uses impressive results from past clients to attract new business. While demonstrating a proven track record can help you win clients, it can also set unrealistic expectations. To avoid lawsuits that claim you misrepresented the benefits of your product or service, you might use the disclaimer: “Past performance doesn’t indicate future results. Results may vary and are not guaranteed.”

Disclaimers don’t always shield your business from legal accusations of professional negligence. If you're sued, a judge might throw out a disclaimer if:

• it places an unreasonable burden on the client or customer
• your client or customer didn’t see it or consent to it
• it isn’t specific enough

Even if you clearly state that you are not responsible for errors and omissions, a judge could find you liable.

On your website, errors and omissions disclaimers can help protect your business from claims that the site contained inaccurate information that resulted in some negative consequences.

For example, a “results may vary” disclaimer attached to online case studies can protect you against claims that you misrepresented the benefits of your service to new clients.

By including E&O disclaimers in your contracts, your business can prevent costly contract disputes and legal action.

When drafting contract disclaimers, the key is to be as specific as possible. Ideally, you would have a lawyer write a series of disclaimers tailored to the client and project. These disclaimers should address common issues like cost overruns, missed deadlines, and professional liability for third-party hardware or software.

Unfortunately, generic email disclaimers probably won't hold up in court.

For a disclaimer of liability to be valid, both the sender and the recipient would have to agree to the terms of the disclaimer. Simply receiving an email with a disclaimer does not imply agreement.

Judges typically throw out generic legal disclaimers that appear in every email, since there’s no way to confirm whether the recipient consented or even read the disclaimer.

Disclaimers can’t always shield your business from errors and omissions lawsuits, but they can offer some legal protection if used properly. Here are a few best practices for using E&O disclaimers:

Use disclaimers sparingly. Don't add a generic legal disclaimer to all your emails or every page of your website. Instead, only include a disclaimer when you’re worried the recipient might misconstrue your message or pursue an unwarranted lawsuit.

Be open about your disclaimers. If there’s a disclaimer, don't hide it at the bottom of an email or contract. Instead, put it where your client is sure to see it. When you’re transparent, disclaimers can help clarify and improve your legal relationship with your client.

Don’t rely on disclaimers alone. Even if you have a disclaimer, you can still lose an E&O lawsuit. In fact, it happens all the time. Make sure your business carries errors and omissions insurance to be sure you're protected from losses due to lawsuits.

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