Errors & Omissions Insurance2020-01-29T15:16:50-05:00

Errors and Omissions Insurance

We all make mistakes. That’s why having Errors and Omissions Insurance is critical.
This policy may cover financial liability in case of accidental errors or alleged negligence.

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What is Errors and Omissions Insurance?

Errors and Omissions Insurance (E&O), also referred to as Professional Liability Insurance or Malpractice Insurance, is a useful policy that protects you in case you allegedly make a mistake while delivering a product or service or fail to deliver on what you promised.

E&O covers defence costs, judgment, settlements and fines or penalties resulting from the allegations of misrepresentation, breach of professional services, wrongful business practices, misleading advice and conflict of interest.

E&O Coverage

What does Errors and Omissions Insurance cover?

The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm.

Errors & Omissions Insurance  is sometimes required under contract by other businesses that are the beneficiaries of the advice or service. Because this insurance coverage is based on your specific line of work, the protection is different from one industry to the next.

For example, a software company would want protection against the software crashing or a security breach, while an accountant would want protection against mistakes in a tax calculation.

Professions who need E&O insurance

Who needs Errors & Omissions Insurance?

The following professionals should definitely have errors and omissions insurance:

  • Doctors*
  • Dentists*
  • Chiropractors*
  • Physical therapists*
  • Lawyers
  • Accountants
  • Engineers
  • Financial advisors

*Medical malpractice insurance policy

Read about some common scenarios of errors and omission insurance claims.

E&O Cost

What is the cost of E&O Insurance?

The cost of an E&O policy varies according to factors such as:

  • Industry
  • Level of experience in the industry
  • Revenue

It also depends on the nature of your work and the size of your particular business, but generally speaking, here is a breakdown of costs:

  • Consultants start at $400
  • Engineers pay around $1000
  • Software developers start at $500
  • Photographers start at $300

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Which professions require E&O Insurance?

Regardless of the type of professional services business you run, Erros and Omissions insurance is critical:

  • Accountants

  • Accounting Firm

  • Actuaries

  • Advertising

  • Aerial and ground based Photographers / Videographers

  • Alternative Energy

  • Architects & Engineers

  • Appraisers

  • Bookkeepers

  • Broadcasters

  • Building Designers (Bill 124)

  • Business Consultant

  • Chiropodists

  • Civil engineers

  • Collection Agencies

  • Consultants

  • Chiropractors

  • Design Firms

  • Directors and Officers

  • Employment Agencies/Recruiters

  • Engineers

  • Environmental Engineers

  • Energy Audits & Assessments

  • Financial Advisors

  • Financial Planners

  • Foreign Legal Consultants

  • Holistic Professional

  • Hotel Consultant

  • Home Inspectors

  • Human Resources (HR) Consultant

  • Immigration Consultants

  • Information Technology & Computer Consultants

  • Interior Designers

  • IT Contractor

  • IT Specialist/Technician/Programmer

  • Independent Contractor

  • Product Designers

  • Professionals Liability

  • Lawyer’s Excess Professional Liability

  • Management Consultants

  • Medical Related

  • Medical Professionals (Malpractice Insurance)

  • Medical Students (Malpractice Insurance)

  • Multimedia designers

  • Mortgage Brokers

  • Naturopaths

  • Occupational Health and Safety Consultants

  • Quality Control Consultants

  • Placement Agencies

  • Podiatrists

  • Process Servers

  • Private Investigators

  • Project Managers

  • Property Managers

  • Paralegals

  • Publishers and Printers

  • Recruitment and Employment Agency

  • Recruitment Consultants

  • Safety Engineers

  • Service Organizations

  • Solar & Wind Farm Engineers & Consultants

  • Staffing Agencies

  • Structural Engineers

  • Sub Contractor

  • Surveyors

  • Therapist Professionals

  • Training Providers/Trainers

  • Travel Agencies

  • Travel Agents, Tour operators

  • Web-Site Designers

  • Web Developers

  • Workplace Engineers & Consultants

Common scenarios where Errors and Omissions Insurance is useful

Accountant making a mistake

An Accountant fails to file particular documents, and the client sues, claiming that the omissions led to financial loss for him.

Lawyer negligence

Due to miscommunication, a lawyer fails to take her client’s consent before taking a particular action and the client decides to sue for malpractice.

Architect making a design mistake

Design errors by an Architect could become costly when discovered after construction is already underway. Expect the developers to sue!

Frequently Asked Questions about Errors and Omissions Insurance

What is the difference between Errors and Omissions (E&O) Insurance and professional liability insurance?2019-05-21T10:55:34-04:00

Errors and omissions is a popular name for professional liability, they both refer to the same policy and provide coverage to professionals or consultants for errors and omissions in their services. In some industries, it’s also commonly known as malpractice insurance. Regardless of what you refer to it as, it may be important to protect your business practice with this policy.

What is the difference between D&O and E&O insurance?2019-05-15T11:13:50-04:00

The difference is that D&O (Directors and Officers) Insurance only applies to directors and officers of a company and E&O (Errors & Omissions) Insurance applies to any professional who provides a service. Both policies provide coverage for errors and omissions borne out of negligence.

What does Errors & Omissions Insurance (E&O) cover?2019-05-21T10:53:06-04:00

Errors and omissions (E&O) insurance covers legal costs and settlements that arise from claims of errors, omissions, negligence or inadequate service provided by professionals such as doctors, consultants, engineers, accountants, etc. It does not cover any damage done intentionally. 

Do I need E&O insurance if I work from home?2019-05-15T11:45:37-04:00

Yes, as long as you provide a service to a client, regardless of your location, you can be sued for errors and omissions arising out of negligence. It is best practice to protect yourself with insurance as legal costs and settlement fees are devastating for small businesses and freelance professionals.

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