Almost every professional can benefit from errors and omissions insurance, which is also called professional liability, professional indemnity or “E&O” insurance. This coverage will protect you from loss or damage arising from poor or misleading advice, or an act of negligence that leads to a client’s financial loss. General liability policies provide coverage for damages from bodily injury or property damage but leave coverage gaps when it comes to financial losses.
There are many different types of errors and omissions policies and the wording is not standard from carrier to carrier. Also, this coverage is written on what is called a “claims-made basis,” which is very different from other kinds of liability coverage.
Facts About Errors and Omissions Claims
Types of Policies Available
The list below provides an overview of the various professions for which errors and omissions coverage is available. Keep in mind that this is not a complete list, and your agent will be able to provide some guidance when you decide to purchase commercial insurance coverage:
Examples of Losses Resulting in E&O Claims
There are many potential causes of loss that can involve errors and omissions insurance. For example:
Any professional can make a mistake at any time. An Errors and Omissions insurance policy can provide a defense for you even if a claim is groundless or fraudulent. Densmore Insurance Strategies, Inc., a member agent in the Trusted Choice Network, can help you gain a full understanding of E&O insurance. We can assist you in determining whether you need to be protected from various exposures based on your specific line of work.
Errors and omissions policies are written on what is known as a “claims made” form. A standard general liability, by contrast, is known as an “occurrence” policy. A claims-made policy will respond only to claims made while the policy is in force.
The reason for this difference in format is because the events leading up to an error or omission claim can be spread over a long period of time. It is not always possible to point to a given moment and say that is when the error or omission occurred.
Claims made policies have two unique features.
Errors and Omissions Policies Vary
There are no standard policies for errors and omissions coverage. Each carrier writes its own forms. While many features are similar, policies can have substantial differences in coverage. Also, rates are not regulated in this area of insurance as they are in more common forms of coverage and can vary substantially from company to company.
It is important to tailor your errors and omissions insurance to the specific risks you face in your line of work and it is frequently the case that the cheapest policy is not the best policy.
Important Notes on Errors and Omissions Insurance
When you are reviewing your professional liability risks and shopping for an errors and omissions policy, keep the following issues in mind:
How Much Coverage Do I Need?
Errors and Omissions Insurance (also known as Professional Liability Insurance) costs range from a median of $860 to $1,939 and an average of $956 to $2,652 per year. E&O Insurance prices vary depending on the size and type of business you do.
What is Errors and Omissions Insurance In Real Estate?
Errors and omissions insurance, E&O for short, is the name used to describe a type of malpractice insurance coverage for real estate professionals. The coverage protects real estate professionals against financial losses from lawsuits filed as a result of their work in the real estate profession.
What is Notary Errors and Omissions Insurance?
A Notary Errors and Omissions (E&O) policy protects you, as a Notary, should you make an unintentional mistake or omission while notarizing. Or if someone files a false claim against you. Financial damages from a notarization mistake or omission can be filed against your NNA Notary bond.