Mistakes happen. Errors and omissions insurance may help protect your business.
When general liability insurance isn’t enough.
You might think that general liability insurance covers every liability risk you face, but that would be an expensive mistake. This is where errors and omissions liability insurance, or E&O, comes into play. It helps to cover your business and your employees against claims of negligence or actions taken that harm someone else. If your business provides professional services or advises others, you may want to consider having an E&O policy to help safeguard your assets.
What errors and omissions liability insurance covers.
In simple terms, general liability insurance covers the costs of physical damage, whether that be to a person or your business property. Insurance may cover financial losses that other people—such as clients—suffer because of your actions or lack thereof. Coverage may include court costs as well as settlement costs, depending on your policy and the limits.
Does your business need E&O coverage?
If your business offers professional advice or services, such as financial professionals, contractors, non-profits, engineers, doctors, legal professionals, and the like, you’ll want to consider having an E&O policy for your business.
How much is errors and omissions liability insurance?
The cost of an E&O policy may vary depending on your business type, your location, and if your business has had lawsuits or claims made against you in the past.
Which businesses benefit from E&O coverage?
This most commonly involves businesses that give professional advice to their clients. However, with some policies, it may also involve unintentional violations of copyright and other intellectual property law or defamation, such as libel. For companies that provide advice, an E&O policy is essential. It may also prove useful for companies that supply software and similar tools that clients might then use for their own businesses. You’ll want to consider an errors and omissions liability insurance policy that will cover both the costs of any damages themselves and the costs of defending claims for your business.
Are you looking for an errors and omissions liability insurance policy for your business? Contact us to go over your business, the risks you face, and what your coverage options are.
E&O Liability Insurance FAQ
Is errors and omissions insurance the same as professional liability insurance?
E&O insurance and professional liability insurance generally refer to the same coverage. The name may vary by industry. Either way, the policy protects against claims that your professional services or advice caused a client financial harm. Wording varies by policy. Look at what yours says it covers rather than relying on the label alone.
What does "claims-made" mean on an E&O policy?
Claims-made means coverage depends on when the claim is made, not when the mistake happened. Your policy usually responds only if the claim is made against you and reported while it’s active. A claim over work from years ago can still be covered if the work falls after the policy’s retroactive date. That’s why continuous coverage matters. If you plan to close, retire, or switch carriers, ask about extended reporting. It’s often called tail coverage, and it may cover later claims tied to earlier work.
What does E&O insurance not cover?
E&O insurance generally doesn’t cover bodily injury, property damage, or intentional wrongdoing. General liability is the policy designed to cover injury and property claims. Criminal or dishonest acts are commonly excluded, as are problems you knew about before the policy started. Employee claims and data breaches usually need their own coverage, such as employment practices or cyber liability. Exclusions vary by policy.
What if a client contract requires me to carry E&O insurance?
Share the contract’s insurance terms with your agent before signing. Contracts that require E&O may specify minimum limits and how long coverage must remain in effect. They may also ask for proof, usually a certificate of insurance. Some want to be notified if your coverage is canceled or reduced. Catching a gap before signing is easier than fixing one after a client asks for the certificate.
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