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Errors & Omissions (E&O) Liability
Your clients trust you to work on their behalf. If a mistake is made, whether it is a negligent act or an omission, an errors and omissions (professional) policy can provide coverage for the damage incurred to your client. We can guide you to find the best E&O coverage for your business.
When an E&O liability policy helps: Errors or omissions are made while performing duties related to your profession.
E&O or Professional liability covers risk exposures for those that provide professional advice to clients. Some examples of affected industries or occupations include legal, medical, therapists, architects, construction contractors, accountants, real estate professionals, insurance, engineering, publishers, advertisers, authors, social media influencers, technology providers, IT outsourcers, and independent consultants.
E&O/Professional FAQs
What limit should I have for an E&O policy?
E&O/Professional liability pulls money from the same limit pool to defend a claim. That means your legal defense costs can quickly deplete your professional liability limits, leaving you with little or no coverage for a settlement. If your limits aren’t high enough, you might have to go out of pocket for a lengthy court case and an expensive settlement.
We can help you decide the amount needed. It is based on your business exposure, risk, and the amount of risk you are comfortable assuming. We can also discuss risk strategies to seal any gaps.
What is reputation protection?
A messy lawsuit is more than money; it’s your reputation. A lawsuit can impact your reputation. Prospective customers might choose a competitor when they catch wind of your legal woes. Worse, existing and departing clients could decide they’re dissatisfied with your work and bring additional lawsuits against you. Even if you’re innocent, accusations can still damage your reputation. Some professional liability policies will help with the cost of hiring a public relations firm or brand management service.
We can help you select the appropriate coverage for your business.
What is the difference between claims-made versus occurrence?
Claims-made policies
A claims-made policy covers claims made against you and reported to your insurer during the policy period. You’re not covered if you have a claim after your policy terminates. For that, you’d need an extended reporting period (ERP) added to your professional liability policy. This is also known as “tail” coverage.
Claims-made policies can be less expensive initially, but the price can increase over time as the potential for claims increases.
Occurrence-based policies
On the other hand, an occurrence-based policy covers claims that arise when your policy is active, no matter when the claim is reported. It could be years later, even after your policy has been terminated. Occurrence policies often cost more upfront, but they don’t require the added purchase of an ERP.
