Professional liability insurance, also called errors & omissions or E&O insurance, is a form of liability insurance that helps protect you and your company from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.
E&O coverage helps shield you from allegations of failure to perform promised services, financial loss caused by services, and error or omission in the service or product. These are potential causes for legal action that are typically not covered by a general liability insurance policy, which usually addresses more direct forms of harm. Some professional liability policies also offer to cover defense costs, even if the legal action turns out to be groundless.
This form of insurance is required by law in some areas for certain kinds of professional practice, and is also sometimes required under contract by other businesses or clients.
Professional liability insurance may take on different forms and names depending on the profession. In the medical professions it is called malpractice insurance. The terms errors and omissions (E&O) insurance are more commonly used by insurance agents, consultants, brokers and attorneys. Other professions that commonly purchase professional liability insurance include accounting and financial services, construction and maintenance (general contractors, plumbers, etc., many of whom are also surety bonded), and transportation.
The primary reason for professional liability coverage is that a standard general liability insurance policy will only respond to a bodily injury, property damage, personal injury or advertising injury claim. However, various professional services and products can give rise to legal claims without causing any of the specific types of harm covered by such policies. Common claims that professional liability insurance covers are negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice. In today’s litigious society, no professional should forgo the protections offered by this insurance.
Patnode Insurance agents are always available to answer any questions you may have about your professional liability, suggest coverage options best suited for you and your business, and even assist you in filing a claim. Our experienced agents are able to locate a variety of quotes from a number of providers, ensuring the policy you choose offers the best protection at the most competitive rates. Contact us to find out how you can fully protect your business.