Insurance Terms Defined – Errors and Omissions (E&O)
In this post we’re going to look at a very common term in the realm of business insurance – errors and omissions also often abbreviated as E&O.
Errors and Omissions insurance is equivalent to professional liability insurance. Many will use E&O to refer to professional liability – it’s a common term thrown around the industry.
This type of coverage is used by professionals to protect themselves in the event of an error, committed while they are performing their work, that adversely affects their client – usually a financial loss. It corresponds to the type of work that involves an expert giving advice or rendering professional services of some kind.
If a client can prove that a mistake made by your business, or other negligent action on your part, resulted in a loss for them, you could then be held liable for that loss. This is what E&O protects your business from. Even if you are not found liable, this type of coverage can help your business cover the expenses of going to court and defending your organization, which depending on the situation, could be substantial or crippling, especially if you’re a small business.
The types of professionals who employ this type of insurance include lawyers, financial advisers, and engineers, to name a few. If you’re any kind of professional consultant, it’s a good idea to consider some sort of professional liability coverage. For a more comprehensive list of professionals that should consider E&O, including those that must have the coverage in Ontario, check out this post.
Want to consult with an insurance professional about E&O insurance, or any other type of business insurance? Head over here to get in touch with someone from our team.
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