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Professional Liability (Errors and Omissions)

Professional Liability coverage protects businesses and individuals from losses related to wrongful acts (negligent acts, errors or omissions) during the rendering of professional services.

Miscellaneous E&O policies are used to insure almost any type of professional exposure with some modifications as needed.  There are also specialty E&O policies for common professions like Medical or Dental Malpractice, Legal Malpractice, Accountants, Architects & Engineers, Financial Services, etc.

Who Needs This?

Anyone engaged in professional services needs E&O coverage in order to protect them from allegations of wrongful damages.  Commercial General Liability coverage is not sufficient, because it excludes errors and omissions.

Claims Scenarios

An accountant provided allegedly bad advice to her client who lost large sums of money, as a result of this advice.  The client sues the accountant and her firm for damages, in addition to legal costs.

An engineer is accused of providing flawed design requirements for erection of a commercial building and is subsequently sued by the building owner and General Contractor.

Errors & Omissions (E&O): Common Coverage Gaps

Mis-classification

The most common coverage gap is mis-classification (or misrepresentation) of the professional exposure.

Retroactive Date Gap

When switching from carrier to another, be sure the Retro date is matched by new carrier.

Bodily Injury or Property Damage

Most E&O policies exclude claims from BI or PD, but you may want to alter the policy to include “consequential” bodily injury or property damage, depending on your risks.