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What’s the difference between Professional Liability and Errors and Omissions Insurance?

Mar 28, 2022 · 6 minutes to read

Everybody makes mistakes, but even a tiny error can cause big problems. If you’re in the business of providing others with advice, custom products or solutions, you may need insurance coverage that protects against mistakes and other forms of professional wrongdoing.

While searching for coverage, you may have come across Professional Liability and Errors and Omissions insurance. But, which type of policy is right for your business? Are these policies the same, and if so, why the different names?

Let’s answer these common questions by breaking down the differences between Professional Liability vs. Errors and Omissions insurance.

Professional Liability vs Errors and Omissions insurance: Are they the same?

The short answer is: Yes, Professional Liability insurance and Errors and Omissions insurance are the same, and there is no difference in the coverage they provide.

These names are often used interchangeably, though it may be more common to hear one over the other in specific industries. For example, real estate agents and IT professionals are more likely to use “Errors and Omissions” or “E&O” when seeking coverage for professional liability events.

What is Malpractice insurance?

Professional Liability and E&O insurance are the most used names for policies that cover mistakes and other professional offences. However, there is a third name that you may see: Malpractice insurance.

Malpractice insurance is the name typically used in the medical and legal fields. Again, it offers the same types of protections as Professional Liability and E&O insurance, but under a different name.

How Professional Liability insurance can protect your business?

Let’s take a closer look at the protections these policies provide now that we better understand Professional Liability vs. Errors and Omissions insurance.

Professional Liability, E&O, and Malpractice insurance help shield businesses against claims and lawsuits resulting from the services they provide or the products they make. This includes a wide range of events, such as:

  • Mistakes and errors
  • Unintentionally omitting information
  • Missed deadlines
  • Undelivered services
  • Negligence
  • Breaches of contract

Your policy will protect you by covering your legal expenses related to the claim or lawsuit. This includes not just the cost of hiring an attorney but also miscellaneous court costs, settlements, and judgements.

As you can probably imagine, professional liability lawsuits can be very expensive. Few small businesses can afford the costs of defending themselves against these claims, especially since legal action often takes months—or even years—to resolve. Professional Liability, E&O, and Malpractice insurance all remove this burden from your shoulders, helping you stay in business while your claim is settled.

Importantly, these protections apply even if the claim made against you is invalid or without merit.

Professional Liability Claims Example**

Here’s a quick example of Professional Liability insurance in action:

You’re an architect designing a new school. You are unaware that the accessibility requirements for schools recently changed and are now different from other public buildings. The school is cited for code violations, and you must appear in court as the building’s designer. Your Professional Liability insurance will protect you against this negligence claim.

Who needs Professional Liability insurance?

There are many types of businesses and professional service providers who could benefit from the safeguards that Professional Liability insurance provides. We’ve touched on a few of these already regarding E&O coverage and Malpractice insurance:

Other occupations that typically consider a Professional Liability policy include:

If you don’t see your profession listed above, you may be wondering if Professional Liability coverage is right for your business. Generally, if you or your employees do any of the following, you may want to consider getting a policy:

  • Provide others with a professional service
  • Use your specialized knowledge or expertise to give advice or recommendations
  • Design custom solutions or products
  • Represent a client’s interests on their behalf

Is Professional Liability insurance ever required by law?

Some professionals may be required by law to have a minimum level of Professional Liability, E&O, or Malpractice insurance coverage. Certain occupations must show proof of insurance when applying for their professional license in some states. Without a license, you will be unable to legally work in your field.

Always check state and local law to understand the insurance and licensing requirements in your area. If you are a member of a professional association, you may also need to review their membership requirements. They may have additional insurance obligations for their members.

Protect your business with BizInsure

Now that we’ve answered the question “Is E&O the same as Professional Liability?” you might be ready to find a policy that fits your business needs. BizInsure has simplified the process, so busy business owners can quickly find, compare, and buy the policies they need in just minutes.

To compare the difference between Professional Liability and Errors and Omissions policies for your business, simply:

  1. Click here to start comparing quotes.
  2. Choose the policy that fits your business’ needs.
  3. Purchase your policy and instantly receive your certificate of insurance.

From start to finish, you could be covered in just 10 minutes.

*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice.
**The provision of claims examples is for illustrative purposes only and should not be seen as an indication as to how any potential claim will be assessed or accepted. Cover for a claim will depend on the specific circumstances around the loss and would be subject to the terms and conditions of the policy concerned. As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained in this webpage is general only.  Coverage for claims on the policy will be determined by the insurer, not BizInsure, and will depend on the specific facts and circumstances involved.

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