Understanding Errors and Omissions (E&O) Insurance

Errors and omissions insurance is a form of liability insurance. It         

protects companies against the full costs of a claim made by a client     

against a professional who provides advice or a service

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What E&O Insurance Covers:

The benefits E&O insurance gives companies or individuals vary greatly depending on the policy and issuing insurance company. Broadly speaking, E&O insurance covers:

• Errors, mistakes, or oversights incurred during the course of work.

• Failure to meet a deadline or deliver a specific service promised to a customer.

• Professional negligence.

• Failure to meet a specific standard of care, especially if outlined by a given profession.

• Breach of contract.

Regarding specific expenses, E&O may cover legal and court costs should a company find itself in court. Attorney and other legal fees are often covered whether or not the company is found to be guilty of the matter at hand. E&O may cover specific types of settlements of judgements in which the company is found at fault. It also covers damages and expenses incurred to others for wrongdoing.

 

Some E&O policies are not geographically bound and may still cover work performed outside of the company's primary country of operation.

 

What E&O Insurance Does Not Cover

These policies do not cover criminal prosecution and certain liabilities that may arise in civil court not listed in the policy.

This includes illegal acts, intentional deeds of wrongdoing, or criminal activity. E&O insurance often does not cover bodily injury inflicted by your business as that is typically covered by general liability insurance.

E&O insurance may or may not cover temporary employees, claims stemming from work done before the policy was in force, or claims in various jurisdictions.

It may also not cover information leaks due to cybercrime, employee injuries, or discrimination claims. 

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