Errors and Omissions insurance, also known as E&O insurance, is professional liability coverage for claims associated with providing a professional service or failing to provide a professional service. Regardless of the profession you are in, an error, omission or even an honest mistake that results in financial injury to someone can put you and your business at risk. This sort of policy protects you and your company from handling the entire cost of damages and defense for claims that may occur. This is a separate coverage from your conventional property insurance or general liability.
Costs Covered by E&O Insurance
Errors and Omissions insurance does not include deliberate fraudulent or illegal acts or punitive damages. The policies have specific limitations of liability and usually include both legal costs and damage awards in a single limit. E&O insurance cost coverage benefits include for the following protection:
- Defending against lawsuits without merit
- Damage, settlement and judgment awards
- Coverage in increments of $1 million
- Claims-made basis designation
- Perfect for difficult-to-insure professions
A professional liability suit must claim negligence in either the performance or the failure to perform professional services.
Successful professionals with only a generic policy may be open to more risks and liability. Make sure you speak to a team of licensed professionals about E&O insurance cost versus risks to review your policy and analyze each angle to protect you and your business from unforeseen threats.