What’s the difference between general liability and professional liability insurance?

General liability insurance protects businesses from physical risks like personal injuries or property damage. Insurance for professional liability protects against harm caused by company activities such as misinformation, negligence, or offering bad services that result in damage to clients. Some examples of General liability protection include: Injury to clients or members of the public on company premises. Injuries caused to non-employees during business operations. Property damages that occur during normal operations (in some cases). The main difference from professional liability is that this type of insurance does not protect a business against losses resulting from professional (intangible) work. Professional liability insurance, on the other hand, covers damages resulting from negligence, misrepresentation, or inaccurate professional work.

What’s the difference between E&O insurance and professional liability insurance?

Errors and omissions (E&O) insurance is the same thing as professional liability insurance, just called by another name. Specific coverages and terms can vary by provider, individual policy, or business. Generally speaking, though, the two terms are interchangeable.

Why do you need errors and omissions insurance?

Insurance for errors and omissions is essential for businesses offering services or advice—especially if it’s something clients rely on for making decisions. E&O provides coverage for financial losses resulting from mistakes, neglect, misrepresentation, or mismanagement. This type of insurance is vital because it helps to protect your business from potential claims and lawsuits arising from the professional services you provide. In these cases, E&O insurance safeguards business owners against costly litigation costs and judgments if a client files a claim or lawsuit. If you are providing services or advice, make sure you have adequate E&O coverage in place.

When is E&O coverage required?

In many cases, professionals such as lawyers and doctors are required to carry E&O insurance to practice. However, even if your profession does not require coverage by law, having proper E&O coverage can help protect your business from financial losses due to mistakes or oversights. In addition to legal requirements imposed on certain professions, some businesses may also contractually require their contractors to carry E&O coverage. Understand what type of protection you need and make sure you have adequate coverage in place before providing any services or advice.

How much E&O insurance do I need?

The amount of E&O insurance you need depends on the type of services or advice you provide and the size of your business. Generally, business owners should carry enough protection to cover potential claims or judgments up to three times the annual revenue generated from providing services or advice. Make sure your policy has adequate limits for legal defense costs, plus additional coverage for mental anguish damages, as these are generally excluded from most policies. You should also consider if there is a need for special endorsements, such as cyber liability coverage to protect yourself against specific risks associated with data security breaches or other online exposures. Ultimately, speaking with an insurance agent is the best way to determine how much E&O insurance is right for your business.

What are the most common E&O claims?

The most common E&O claims arise from professional negligence, work that is mistaken or incomplete (contains errors or omissions), breach of contract, wrongful advice, and wrongful acts. Professional negligence involves any failure to meet accepted standards of care when providing services or advice. Errors and omissions refer to situations where there is an omission of a service or duty that should have been performed by the professional. Breach of contract occurs when a professional fails to perform their contractual obligations. Wrongful advice is when an individual provides inaccurate information, guidance, or analysis that results in detriment to the client. Finally, wrongful acts are intentional wrongdoings such as fraud that result in financial losses for the recipient of services or advice. In general, these claims can be difficult to defend against without proper E&O insurance coverage, as they often involve substantial defense fees and damages awarded due to lawsuits. It’s important for professionals offering services or advice to adequately protect themselves with E&O insurance so they can ensure financial security for their business well into the future.

Professional Liability Insurance | Best E&O for November 2024

Professional liability insurance is also known as errors and omissions Insurance, or E&O insurance.
Errors and omissions insurance (E&O) is one of the most important insurances for companies and protects your business from claims of negligence or failure to perform professional services as a result of errors or omissions of information made by your business.
E&O insurance is especially important for consultants, lawyers and advisors, professional contractors, accountants, an other professions that offer advice and knowledge-based services.
Professional liability policies typically cover costs relating to third-party liabilities, legal defense, and settlements in the event of a lawsuit.
On average, professional liability insurance costs $61/month. The cost varies based on the type of business, its size, prior claims history, and established risk management procedures.
Each business is different and requires a unique set of coverage types. We recommend using an online quote tool to be matched with the right types of business insurance for your company.

Errors and omissions insurance (E&O), also known as professional liability insurance, is a type of insurance that covers businesses for claims of business negligence, malpractice, or failure to perform services as contracted by a customer.

What is the meaning of errors and omissions in insurance?

“Errors” refer to errors or mistakes made by the company or employees. “Omissions” refers to omissions of information or advice given by the company. Therefore, errors & omissions insurance covers you from both forms of mistakes that could cause potential lawsuits for the company when a mistake is made. E&O can help your business cover legal defense costs for claims related to errors or omissions in your workmanship or professional advice given by your company’s employees or agents.

However, as with any insurance, coverage depends on the limits of the policy you purchase. For this reason, it is crucial to understand your insurance coverage and do research when selecting an insurer to ensure adequate protection.

In this article, we’ll show you what E&O coverage includes and how much it typically costs, and will provide helpful tips for choosing the best business insurance provider for your needs. But first, here is a look at our top picks for the best errors and omissions insurance.