What is Errors and Omissions (E&O) Insurance?
Errors and omissions (E&O) insurance is a type of professional liability insurance that protects businesses from lawsuits claiming that they made a mistake or failed to provide the promised services. E&O insurance can help with legal costs, settlements, and judgments. Please contact Bradford Turner Insurance Group in Cumming, Ga for your E&O insurance needs.
Who Needs E&O Insurance?
E&O insurance is essential for businesses that provide professional services, such as:
- Accountants
- Lawyers
- Doctors
- Consultants
- Financial advisors
- Real estate agents
- Contractors
However, any business can benefit from E&O insurance, as even small mistakes can lead to expensive lawsuits.
What Does E&O Insurance Cover?
E&O insurance can cover a broad range of claims, including:
- Negligence
- Breach of contract
- Misrepresentation
- Failure to disclose
- Wrongful advice
What Doesn’t E&O Insurance Cover?
E&O insurance does not cover claims developing from:
- Criminal activity
- Intentional misconduct
- Bodily injury or property damage
- Cybercrime
- Data breaches
How Much Does E&O Insurance Cost?
The cost of E&O insurance differs depending on the business’s size, industry, and risk factors. However, it is usually a relatively affordable type of insurance.
If you are considering purchasing E&O insurance, compare quotes from multiple insurers to get the best possible rate.
Is Errors and Omissions Insurance Required?
E&O insurance may be required for certain types of professions, such as attorneys, medical professionals, contractors, and real estate agents. These requirements may vary by state and profession. Even if E&O insurance is not required in your state, it’s still worth taking into consideration. Without this coverage, you could face hefty out-of-pocket expenses if you get sued for a mistake.
Types of E&O Insurance Policies
There are two types of E & O insurance policies, occurrence and claims-made.
Occurrence policies cover claims that occur during the policy period, even if they are reported later.
Claims-made policies only cover claims that are reported during the policy period, even if they occur earlier.
Here are some examples:
- Occurrence policy: Company A starts an E&O occurrence policy in March 2021. In June 2021, Company A made a mistake. The client doesn’t find out about the mistake until October 2023. Company A’s insurance policy will still cover the claim.
- Claims-made policy: Company B starts an E&O claim-made policy in April 2021. The policy has a retroactive date of December 2020 and a 60-day extended reporting period (ERP). In July 2021, Company B made a mistake. The client doesn’t find out about the mistake until February 2023. The claim will not be covered because it was not reported during the policy period or during the ERP.
Which type of E&O insurance is right for you depends on your business needs. If you are unsure, talk to an insurance broker.
