What is professional liability/ errors & omissions insurance and why do I need it?
Professional liability is also known as errors & omissions or E&O.
I could read you the definition but you probably didn’t come here for that. You’re probably wondering how does this specifically apply to me?
One of the unavoidable reasons can be that your state might require the coverage in order to satisfy a license requirement.
Other reasons might be due to contractual requirements between you and a client.
But there are of course practical reasons you will need this coverage. As careful and risk conscious as a business might be, claims can arise from false and or frivolous allegations causing a business to incur defense costs. In most professional liability policies, you insurance carrier has a duty to defend you when the claim falls within the policy’s limits and scope of coverage.
Of course…there can always be the case of a professional making an error or omission when rendering professional services.
A home inspector fails to see a crack in a drain pipe located under the kitchen sink. Soon after the new homeowner moves in, the pipe bursts while the dishwasher is draining causing substantial water damage.
An Engineer might miscalculate the load bearing weight of a balcony. After 4 years of use, the structure collapses.
A lawyer loses a lawsuit and it is later alleged that there was a conflict of interest that affected the lawyer’s performance and the outcome of the verdict.
Each of these situations will likely result in a claim due to the professional’s rendering or failure in rendering professional services.
Professional liability insurance is the proper coverage to maintain in order to provide financial for your business from allegations of negligence in rendering professional services.
If you’re looking for a quote, we can obtain competitive quotes from several insurers so you can make an informed decision about this important coverage.