Professional Liability or Errors and Omissions (E&O)

Professional Liability is a type of liability coverage designed to protect traditional professionals like medical doctors, accountants, lawyers, and quasi-professionals like real estate brokers, consultants, against liability incurred as a result of errors and omissions in performing their professional services.  Contractors that are required to maintain a license such as electricians, plumbers, and HVAC contractors also need this coverage.

Errors & Omissions, is another term for Professional Liability Insurance, which covers lawsuits or claims made by you clients. Errors & Omissions Insurance covers the cost of defending a lawsuit even if the lawsuit is groundless. These [policies are designed to cover financial losses rather than liability for bodily injury and property damage.

Your client may sue that the services you provide them caused them to suffer financial harm through the following:

• Mistakes or alleged mistakes on your part errors.
  
• Failure or alleged failure to perform some service omission.
  
• Common claims for errors and omissions lawsuits include:
  
• Negligence or misrepresentation
  
• Violation of good faith and fair dealing
  
• Wrong advice
  
• Privacy violations
  

The benefits of having Professional Liability of Errors & Omissions Insurance are the following:

• $1,000,000 of coverage for any errors or omissions lawsuit
  
• $10,000 of coverage for any disciplinary proceedings regarding a license or certification
• $500/day up to $10,000 of coverage if you are sued or disciplined and must make an appearance.

The limit is usually the same with the regular general liability insurance, which is $1,000,000 each occurrence, $2,000,000 aggregate. The per occurrence limit is the maximum amount paid out for a covered loss resulting from a single event. The limit includes claim expenses such as defense cost. The aggregate limit is the maximum amount paid out for all covered losses during at the policy period. The limit includes claim expenses such as attorney fees, legal costs, settlement, and judgment.