Errors & Omissions Insurance: Do You Need It?
Errors & Omissions (E&O) insurance, also known as professional liability, is one of the most overlooked but essential coverages for professionals who offer services or advice. It protects you from the risks of costly lawsuits that could arise due to mistakes, negligence, or unsatisfactory work, even if the claims are unfounded.
Why Is E&O So Important?
Imagine these scenarios:
A printer misspells the groom's name on hundreds of custom-engraved wedding invitations.
A plumber’s faulty repair causes extensive water damage in an office building.
A product doesn’t perform as expected, and the manufacturer is sued for not delivering the promised functionality.
These are just a few examples of situations where E&O coverage would step in. Without it, these incidents might not be covered by general liability insurance, leaving you or your business to cover the cost of lawsuits, settlements, or defense fees.
What Does Errors & Omissions Insurance Cover?
E&O insurance is designed to protect you or your company against claims that arise from errors, omissions, or negligent work. Here’s what it typically covers:
Claims of Negligent Work: Whether it’s an actual mistake or a perceived oversight, E&O protects you from legal claims of inadequate work.
Judgments and Settlements: If you are found liable, E&O covers the financial settlements or judgments awarded to the claimant.
Defense Costs: Even if the claim is unfounded, E&O will cover your legal defense costs, which can quickly add up.
How Is E&O Different from General Liability?
While general liability insurance covers bodily injury, property damage, and general business risks, E&O insurance focuses specifically on the risks associated with providing professional services. General liability won’t protect you if a client sues for a professional mistake or poor advice—that’s where E&O fills the gap.
Do You Need Errors & Omissions Insurance?
If you answer “yes” to any of the following, you likely need E&O coverage:
Do you provide services or advice for a fee?
Do your clients require you to carry E&O insurance?
Do you offer professional advice or expertise as part of your business?
Even if you have a strong track record and believe you’re not prone to making mistakes, we live in an increasingly litigious world. A single lawsuit, even if baseless, can be enough to drain your financial resources with legal costs. E&O insurance gives you peace of mind, knowing you’re protected.
How Do You Get Covered?
When seeking E&O coverage, preparation is key. The more details you can provide, the easier it will be for us to find the right policy for your business. Here’s what you’ll need:
Resumes and contracts: Demonstrating your expertise and professionalism.
Financials: Insurers may ask for your financial history.
Quality control procedures: Showing how you maintain high standards and reduce risks in your services.
By providing thorough and accurate information, we can match you with the right insurer and coverage tailored to your unique business needs.