Errors and Omissions (E&O) insurance has many names. For some healthcare professionals, it’s called malpractice insurance. For lawyers, it may be called professional liability insurance.
Whatever name it goes by, E&O insurance is designed to protect you or your company from potential financial damages that may arise from a client holding you responsible for a service you provided that did not meet an expected or promised outcome. Some E&O policies are designed to protect you from claims of a failure to provide a service. E&O covers risks that your general liability insurance policy probably does not.(1)
Most E&O policies cover judgments, settlements, and defense costs associated with any civil suits initiated by a dissatisfied client.
Who Should Consider?
While E&O insurance is commonly associated with professionals such as doctors, lawyers, and financial advisors, anyone in the business of providing a service for a fee should consider obtaining coverage. Whatever your profession, try to imagine your potential liability if the work performed by you or your employees was not properly done.
Most errors and omissions insurance can be structured to meet the specific needs of your business. For example, a wedding planner has a different risk exposure than an accountant, necessitating a different form of coverage.
1. The information in this material is not intended as legal advice. Please consult a legal professional for specific information regarding your individual situation.