Errors & Omissions (E&O) insurance, also known as professional liability insurance, is a type of coverage that protects professionals from claims of negligence or inadequate work that result in financial loss for their clients. This insurance is designed to cover legal expenses, court costs, and settlements or judgments that may arise from lawsuits alleging errors, omissions, or mistakes in the services provided by the professional. Errors & Omissions insurance is essential for professionals in various industries, such as consultants, lawyers, accountants, real estate agents, and technology companies, to protect themselves from potential lawsuits and financial liabilities stemming from professional errors.
Errors & Omissions (E&O) insurance typically covers claims related to professional negligence, errors, or omissions in the services provided by the insured. Some common types of claims that errors & omissions insurance may cover include:
- Failure to deliver promised services: If a client alleges that the professional failed to deliver services as promised or agreed upon.
- Professional negligence: Claims of errors, mistakes, or oversights in the professional’s work that result in financial harm to the client.
- Misrepresentation: Allegations of providing inaccurate information, misleading advice, or misrepresenting facts to the client.
- Breach of contract: Claims that the professional breached a contract with the client, resulting in financial losses.
- Copyright infringement: Claims of using copyrighted material without permission or violating intellectual property rights.
- Data breaches: Claims related to data breaches or mishandling of confidential information that leads to financial losses for the client.
It is important for professionals to carefully review their errors & omissions insurance policy to understand the specific types of claims covered and any exclusions that may apply.