Errors and Omissions Insurance: FAQs for Business Professionals
Posted on: 19 February 2021
When you step into the role of being a business owner, you have to look at yourself and your business as an entity in itself. This means that when something goes wrong because of an error in action or some kind of negligent act, your business can be held liable for those mistakes. Errors and omissions insurance (E&O insurance) is a form of protection for business professionals and the entity they represent. Here is a look at a few of the common questions business professionals tend to have about E&O insurance.
1. Who should invest in errors and omissions insurance?
E&O insurance is designed to protect business professionals who may be at a higher risk of being sued by a client or customer. In general, the insurance can step up and help cover the costs if your company is sued because you did not provide a service in a satisfactory way or if you were perceived as negligent on some level. A few examples of types of business professionals who many need E&O insurance include:
- Real estate agents
- Notary publics
- Home inspection companies
- HVAC technicians
- Wedding planners
- Financial agents
2. How much errors and omissions insurance do you actually need?
The number of errors and omissions insurance you actually need can vary depending on the industry. For example, a notary may be recommended to carry $25,000 of E&O coverage if they are not covered under the policy of an employer that the notary is employed by. It is good to do a bit of research about this type of professional liability insurance in your specific industry to find out how much you should carry.
3. Who offers E&O insurance?
E&O insurance is usually offered by any company that provides commercial insurance policies. In some cases, errors and omissions will be covered by a part of a commercial policy and be listed under a different name. For example, E&O may be listed as professional liability insurance coverage within your well-built commercial insurance policy.
What is the difference between E&O and D&O professional insurance coverage?
Errors and omissions insurance is specifically created to give policy protection to the business and anyone who may be working as an employee or representative of that company. For example, an HVAC company's policy would cover all technicians employed by the company and acting as representatives of the business. D&O insurance, which stands for directors and officers insurance, is more geared toward the upper-level directors or managing officers of that company.
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