Errors & Omissions Insurance

Errors and Omissions Insurance

Alleged or otherwise, mistakes are inevitable. That’s why Errors and Omissions Insurance is critical.
This policy provides financial coverage 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, provides financial protection for professionals against claims and lawsuits alleging negligence or failure to deliver a service or product as promised.

E&O Coverage

What does Errors and Omissions Insurance cover?

Errors and Omissions Insurance is a type of insurance that provides financial coverage for professionals against claims or lawsuits alleging:

  • Failure to deliver a service as promised;
  • Delivery of a service that resulted in a financial loss for the client; and,
  • Error, omission, or negligence that resulted in financial loss or damage to the client. 
Professions who need E&O insurance

Who needs Errors & Omissions Insurance?

If a client believes you failed to deliver a service as agreed or are negligent, they may file a lawsuit against you.

Errors and Omissions Insurance is recommended for any professional who:

  • Gives advice or offers a service for a fee.
  • Develops and provides devices and products.
E&O Cost

What is the cost of E&O Insurance?

For a typical small-business, you can anticipate spending approximately $250 annually on a basic professional liability insurance policy with a $100k limit.

The following factors are taken into consideration when determining the best Errors and Omissions insurance policy options for you:

  • Industry and Services Offered
  • Annual and Project Revenue
  • Number of Employees
  • Years of Experience
  • Business Size and Location

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Common scenarios where Errors and Omissions Insurance is useful

Accountant making a mistake

Problem: You are an accountant and you fail to file necessary documents. The result is financial loss for your client.

Outcome: Your client successfully sues you, claiming that the omissions led to financial loss. Your E&O insurance covers the legal expenses and monetary judgement, totaling $23,000.

Lawyer negligence

Problem: You are a lawyer. Due to miscommunication, you file an action before receiving consent from your client, which they do not approve of.

Outcome: Your client successfully sues you for malpractice and your E&O insurance covers the legal expenses, totaling $62,000.

Architect making a design mistake

Problem: You are an architect and accidentally provide a faulty design for a construction company. The mistake is not discovered until construction is already underway.

Outcome: The client sues you for the cost to extend the project. Your E&O insurance covers the costs, totaling $180,000.

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

Frequently Asked Questions about Errors and Omissions Insurance

What is the difference between Errors and Omissions (E&O) Insurance and professional liability insurance?

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?

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?

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?

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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