Commonly known as Errors and Omissions (E&O), professional indemnity, or malpractice insurance. They all refer to insurance which keeps you and your company protected from civil lawsuits for negligence, common mistakes, omissions, misrepresentations claims and more.
Who Is E&O Insurance Coverage For?
E&O insurance affords coverage for any business which offers professional services, such as lawyers, accountants, consultants, investment advisors, real estate agents, architects, medical experts, engineers, tech companies, and others.
What Does an EPL Policy Cover?
A preferred professional liability policy will cover your defense costs, as well as damages you are ordered to pay and settlements reached in and out of court.
What is most important to take into consideration when discussing what an E&O policy covers, is that these errors and omissions need to be unintentional in order for the insurance to pay claims on the policy. Some of these unintentional acts covered by E&O insurance include:
- Bad Advice: When a client loses money or suffers other damages as a result of taking advice from you which proved to be detrimental to them.
- Misrepresentation: When you promise to deliver a product or service in a certain way or at a certain time and you do not follow through with that promise.
- Violating Good Faith: Any act that includes a failure to communicate or the withholding of vital information and general noncooperation.
- Copyright Infringement: Some E&O policies can protect you if you have unintentionally violated someone’s copyright, whether in logos, designs, written words, software code, etc.
- Why Do You Need Errors & Omissions Insurance?
No matter how good you are at performing your job or the experience that you have, you are bound to make a mistake or have a disgruntled client. E&O coverage protects you if you make a mistake and the customer and/or client decides to file a lawsuit against you and your company.
In some instances, E&O claims are not even related to money. A claim can be made for less tangible issues, such as loss of reputation or emotional distress.