Do You Need Errors & Omissions Insurance?

Professional liability is an important part of a business insurance portfolio, covering you in the event a client takes you to court. A large part of these cases involve errors and omissions: service errors, contract disputes, and other “work mistakes.”

What Does Errors & Omissions Insurance Cover?

Errors & omissions insurance, typically called E&O, covers financial loss by a third party for whom you provided professional services.

E&O insurance provides coverage for oversights, undeliverable services, missed deadlines and accusations of negligence involving your business. Even a small professional error can cost a client—and therefore your business—money.

Do I Really Need E&O Insurance?

Any business that performs a service or provides care may be exposed to a professional liability claim involving E&O:

  • Contract-driven professions like financial services, architects and contractors
  • Advice-based professions like doctors, therapists and lawyers
  • Creative professions like writers, artists and event planning
  • Online or virtual businesses like IT, computer consulting and web development

Say you’re a local real estate agent, insured with a small commercial general liability policy. After helping a particular client purchase a home, you receive a letter notifying you of a lawsuit. You made a mistake listing square footage on an MLS sheet, and the error was realized after the client bought the home. E&O covers the cost of hiring a lawyer and associated legal fees; it can  help save the future of your business.

E&O can usually be added to your business’ professional liability coverage plan, and bundled with other commercial coverages for a good price.

Related: Professional Liability Insurance

What Isn’t Covered by E&O?

As with any insurance policy, there are a few exclusions. Contact your broker to make sure you have the coverage you need.

  • Bodily Injury & Property Damage: these are usually covered under general commercial liability
  • Insured vs Insured: claims between two parties insured under the same policy are excluded
  • Claims arising from malicious, fraudulent or criminal acts
  • Infringement of copyright, trademark or patent

Errors & omissions policies can be customized for the specific type of service your business offers. We all make mistakes—protect the future of your business with E&O insurance.

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