Errors & Omissions (E&O) or Professional Liability Insurance
E&O insurance is a kind of specialized liability protection against losses not covered by traditional liability insurance. It protects you and your business from claims if a client sues for negligent acts, errors or omissions committed during business activities that result in a financial loss. Somethings to consider when purchasing an E&O Policy:
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Past Mistakes
Some events resulting in a loss for a client may have occurred several years in the past, and the first time the mistake is apparent is when a court summons arrives in the mail. That’s when the retroactive date on the policy is very important. The farther back the retroactive date of the policy, the more coverage and protection it offers.
Attorney Fees
Even if claims are found to be unwarranted, legal fees and other related expenses can quickly eat up a company’s cash reserves in no time, causing a financial hardship. Most errors and omissions insurance policies cover judgments, attorney fees, court costs and settlements up to the limits of the policy.
Do I Need It?
You need errors and omissions insurance if you’re in the business of providing a service to clients for a fee. We typically provide E&O coverage to printers and building-trades contractors, such as electricians, plumbers, HVAC installers and sheet metal workers.