Errors and omissions insurance protects professionals from the mistakes that they can make while serving their clients. An architect who designs a house that doesn’t meet the standards for the location might benefit from having an E & O policy.
Errors and omissions insurance is a type of professional liability insurance. These types of policies protect professionals from legal liability that is caused by their errors, omissions and negligence.
E&O does not offer protection for criminal acts or for acts that are dishonest. Professional liability provides coverage for the “honest” mistakes that professionals make.
Do You need Errors and Omissions Insurance?
If you are in a profession where others are being sued for mistakes they have made or are alleged to have made, you may need an errors and omissions policy or some other type of professional liability policy. Not having such a policy could mean the end of your career. It could also mean that all your assets are lost in a law suit.
What Else Is Covered By An Errors And Omissions Policy
You will probably find that your insurance company will hire a lawyer represent you in court. This benefit will be in addition to any money they pay to the party that sues you.
What if an E&O Claim is Filed Years After the Error is Made?
These policies are written on what is known as a “claims made” basis. This means that if you the professional are sued in 2013 for an act that occurred in 2009, the policy that is in force in 2013 will cover the claims.
This gives better protection in those cases where an error is not discovered right away. This is good for both the professional being sued and the person who makes the claim.
How much does E&O Cost?
It depends on the profession, but usually the premiums are very affordable. Insurance agents can expect to pay less for the errors and omissions coverage than they do for their cable bill.
You can get quotes for errors and omissions insurance coverage and for other business insurance policies on this site.