What is E&O Insurance?

E&O Insurance, also known as errors & omissions insurance or professional liability insurance, is a type of business insurance that covers service providers from claims of negligence or failure to perform. Even if you didn’t make a mistake, you can still be sued. Without E&O coverage, you’d have to cover the legal fees yourself.

What Does E&O Insurance Cover?

E&O covers mistakes and oversights by a service provider in the course of their work. Some examples of covered events include:

• Missed deadlines
• Breach of contract
• Failure to meet a certain standard of care
• Negligence
• Inaccurate advice
• Legal fees
• Attorney fees
• Settlements & judgments

E&O Coverage Example

Kate is a real estate agent who represented a couple on the sale of their home. After the home was sold, the buyer discovered damage to the home’s foundation, which wasn’t disclosed. The buyer sued, alleging the damage was known to the seller and Kate.

In this case, real estate E&O insurance can help pay for Kate’s legal defense, settlement, and/or judgment.

What Isn’t Covered?

• Protected customer data that is lost or stolen in a cyber breach.
• Employment practices like harassment or wrongful termination.
• Bodily injury or property damage caused to a customer or client.
• Employee injury or illness incurred during their work duties.

All of these examples are covered by different types of business insurance, so are excluded by E&O.

Who Needs E&O Insurance?

Any business that offers professional advice or services to clients will want to consider errors and omissions coverage. Some of the most common purchasers of E&O include:

• Accountants / Tax Professionals
• Advertising Agencies
• Consultants
• Financial Advisors
• Graphic Designers
• Insurance Agents
• Real Estate Agents
• Travel Agents

Each business is unique and requires a custom combination of coverage to protect it from risk exposures. E&O coverage is one option, amongst many, that might be necessary for your business. Work with an experienced business insurance agent who can provide coverage recommendations and explain those recommendations. Then, get competing quotes from multiple insurance companies to find a competitive price. Luckily, our independent insurance agents can do both. Find a location near you or request quotes to get in touch with one of our experienced business insurance agents.