Errors & Omissions Insurance
Errors & Omissions Insurance Information
What Is Errors And Omissions (E&O) Insurance?
An error or omission, a mistake, which causes financial harm to another, can occur on almost any transaction in any profession. This type of insurance helps to protect a professional, an individual or a company, from bearing the full cost of defense for lawsuits relating to an error or omission in providing covered Professional Services. This is a separate coverage from a standard general liability or property insurance policy. These policies are used by professionals such as Mortgage Professionals, Financial Planners and Advisors, Insurance Agents, Doctors, Lawyers, and many more.
Some Common forms of Errors and Omissions Insurance include:
- E&O Insurance
- Errors Omissions
- Errors & Omissions
- Professional Liability
- Professional Liability Insurance
- Malpractice (legal and medical professionals)
In general E&O insurance is designed to help pay for defense costs and the damage awards associated with professional liability claims. Even the most diligent professional can be held liable for a professional error, omission or mistake. Defense costs can be a very significant portion of the cost of an errors and omissions insurance policy. It is very normal for a professional to spend thousands of dollars on defense costs for a matter that ultimately gets dismissed.
A Professional liability claim must allege negligence in either the performance of or failure to perform Professional Services. Errors and omissions insurance policies have a specific limit of liability and usually include both legal costs and damage awards in a single limit. E&O insurance does not cover intentional, fraudulent or illegal activities or in most policies, punitive damages.
It is important to note that because all Errors and Omissions policies are unique, not all claims may be covered by your policy. Be sure to read your policy very carefully and understand how it works for you.
Why Should I Purchase Errors and Omissions Insurance For My Business?
Lawsuits aren’t just about negligence; they are about allegations of negligence. We live in a very litigious environment where any professional can be sued, even innocent professionals. Many innocent parties are brought into a suit simply because they are part of a transaction. In other words, the alleged error or omission does not have to be your error or omission. Defending the reputation of your business, whether the allegation is frivolous or not can still result in lost productivity and legal costs exceeding hundreds of thousands of dollars.
Errors and Omissions Insurance allows you plan ahead and transfer a portion of the risk of unpredictable legal expenditures to the insurance carrier, reducing the financial impact of an allegation against your business.
Things to Consider When Buying Errors and Omissions Insurance:
When choosing the right E&O insurance policy you and your agent should work together to consider several factors, including:
What Professional Services do you provide?
What is the legal structure of the business offering the Professional Service?
What Professionals Performing Services on Behalf of our Company?
What Professional Services are provided by or to Related Parties?
Contact us or call the Garsys Agency at 866-432-4753 for further questions.