Understanding Errors & Omissions (E&O) Liability Insurance

When you are in the market for liability insurance coverage, errors & omissions (E&O) is a substantial investment. These policies protect against claims of professional negligence and inadequacy. If you provide any service in your business, you need E&O coverage to protect against costly financial losses.

What Does Errors & Omissions (E&O) Cover?

Errors & omissions is an essential policy for any service business because it covers many of the potential liabilities that may arise while doing business. It typically covers claims of any professional oversights or mistakes in the service provided and your company's failure to meet imposed deadlines. Standard of care issues, breach of contract, and professional negligence usually receive coverage under E&O insurance. The policy typically covers any costs incurred due to these claims, including court costs, settlement fees, legal fees, and damages to those affected.

What Types of Exclusions Will E&O Coverage Have?

Understanding what your E&O policy will cover is essential, but you must also understand what this professional liability insurance excludes. The declaration pages usually specify exclusions, but most E&O coverage excludes deliberate actions, criminal actions, or bodily injury. There are also exclusions toward independent contractor work. Your policy excludes claims associated with cyber activities since cyber liability solutions are available. Claims resulting from discrimination and workplace injuries also apply to other policies, not E&O coverage. One of the most common errors of liability insurance is assuming that your E&O policy covers every type of liability loss. Choose specific coverage for any other threats your business might face.

Should Your Business Have an E&O Policy?

You might wonder if your business could benefit from E&O coverage. These policies benefit most businesses in the service sector, including professional services such as accounting, real estate, and insurance sales. Many regulatory agencies for these industries require E&O policies as part of your licensure. You can also invest in E&O as an event planner, musical performer, or construction worker. Home or auto maintenance workers also benefit from E&O coverage since liability risks are also associated with those professions.

Is Errors & Omissions Coverage the Same as General Liability?

While both policies are forms of liability insurance, there are differences between these two policies. Errors & omissions coverage is specific to professional mistakes and oversights. At the same time, general liability covers other liability losses, including injuries on your property, damage to a customer's property, or damages resulting from using a product. If you work in a service industry, errors & omissions (E&O) insurance is a significant investment. Your premiums will depend upon the level of risk associated with your business based on the industry and your location. Consider the liability exposure your company faces to ensure sufficient liability limits.

About David G. Sayles Insurance Services

At David G. Sayles Insurance Services, we help our clients decide which of these options is best for them based on their current situation and risk factors.  Contact us at 1-855-977-1842 or insureme@dsayles.mysites.io for a consultation!