/ BLOG

What is Errors and Omissions insurance?

Jul 20, 2021 · 4 minutes to read

Two business consultants discussing in a office

Any business, no matter how successful and well-managed, can potentially make errors in delivering its services, or even fail to deliver its services, for a number of reasons, many of them unforeseeable and attributable to human error. Such basic mistakes as an error when adding up figures or failure to pay an invoice on time can have far-reaching, sometimes catastrophic consequences in terms of supplying the services you have contracted to provide. When this happens, however good a relationship you have with your clients they will, naturally, expect to be compensated with either replacement services or a return of the fees and charges they have paid, possibly with additional compensation for their time and inconvenience on top. This is where Errors and Omissions (E&O) insurance can help you and, in extreme cases, perhaps save your business by providing professional liability coverage. 

Errors and Omissions insurance, otherwise known as Professional Liability insurance, protects your business against claims of negligence, misrepresentation or mistake, as well as document or paperwork errors. 

Errors and Omissions insurance provides coverage against a range of legal actions, including: negligence (for example where it is claimed that you have failed to supply goods or services in a timely or contracted manner); misrepresentation (for example where it is claimed that you have not provided an honest description of the goods or services you contracted to supply); violations of good faith or fair dealing (for example where it is claimed that you have acted in bad faith, e.g., taking money for a service that you knew you could not supply); and inaccurate advice (for example advising a client to take a course of action which resulted in them suffering financial or reputational loss). 

If you are facing action from the client on any of the charges listed above, having an Errors and Omissions policy should cover most if not all of your legal expenses. This will include the fees levied by your counsel, expenses incurred in commissioning reports or testimony from experts in the field, fees for administration in dealing with the paperwork involved, fees payable for bringing a case to court, any sums you have to pay in order to come to an agreed settlement, and any fine or penalty that is payable should you be found liable by the courts. 

It should be noted that your Errors and Omissions insurance will not protect you if you set out purposely to mislead clients or employees or act in a wrongful or illegal manner, or if you deliberately act in a way that you know to be wrong. For example, if one of your staff forgets to send an order to a subcontractor, and as a result you are unable to supply services in a timely manner as per contract, that may be covered by Errors and Omissions insurance. If, however, you find that you do not have the cash flow to order the goods from your subcontractor and so deliberately do not do so, this does not constitute an error or omission and you will not be covered if your client takes action. The same applies when dealing with your employees: if a computer error means that your employees are not paid on time, that’s an error or omission; if you deliberately withhold contracted payments, that isn’t. 

Errors and Omissions insurance is provided by many reputable companies to most small businesses that offer services to their clients in return for payment. However, insurers will scrutinize your business to make sure that you do not represent an unwarrantedly high risk. Some industries are specifically excluded by companies due to the high risk nature of their business, and insurers may refuse to offer you coverage if you have previously made a high number of claims against Errors and Omissions insurance provided by other companies. 

If you provide services or guidance to paying customers as part of your business, you should think about getting Errors and Omissions insurance. This is especially the case if you provide extremely technical or complicated services where errors may be more likely to occur, or if errors or omissions from your company could be highly financially damaging for clients. Amongst the types of business that should consider Errors and Omissions insurance are architects, consultants, businesses involved in financial and account services, IT professionals, insurers, non-profit companies, and realtors.

*As with any insurance, coverage will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained in this article 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.

Get Free Online Quotes and get coverage instantly

The coverage you need for your business.

Business insurance is divided into different policies. We offer 4 types so it's easy to design the coverage that fits your business.

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Let's find

The coverage you need for your business

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Love it
Hanna R.
1708272180
Every year, BizInsure is my go to for general and professional liability insurance! Thenrates are unbeatable.
Calandra K.
1708044666
The agent was quick and efficient in generating a quote for my needs.
Theresa F.
1707895796
I enjoy working BizInsure they always answer all my questions and make sure i have the correct coverage for my business.
Prompt and professional service from Biz Insure. Thanks Leslie and Liza!
Bev G.
1707524454
Very easy to sign up for insurance.
Great company
Brown G.
1706896003
Fast and efficient!
Kim C.
1706746693
عالی
alireza J.
1706727364
It was great being able to get a policy that suits my company's need in less than 30 minutes. They were vey thorough. Very competitively priced.
Lynette C.
1706621476
I worked with Andrea for another start up business. She was very knowledgeable and help me pick the correct policy. Amazed at how quickly the process went.
Representative was very kind, helpful, and educated me well. I appreciated today's prompt service with confirmation that I was satisfied with what was provided to me.
Tina P.
1706224051
Great company for.your low cost business insurance needs.
constantin T.
1706156911
Staff was very fessional and friendly. I was able to get a quote and move forward within 20 minutes.
Pebbles S.
1706126428
Wonderful
Complete C.
1705788054
MUY BUENO
Super easy process.
Ashley G.
1704830227
It’s very easy to understand and at a very reasonable price.
Mary M.
1703780096
Professionalism, Quality, Responsive and budget friendly
B D
1703029371
Great rates, easy to understand and select appropriate coverage, can get in a jiffy
Brie C.
1702775397
I have been a customer of BizInsure for a few years now and I love it. There customer service is awesome and the prices are affordable.
Danyale W.
1702132165
Quick easy experience! The rep was knowledgeable & pleasant. Customer care was awesome to respond and clarify my concerns.
Kathy Ann A.
1702059151
bizinsurance makes purchasing Business Insurance...SIMPLE!
Andrea W.
1701380391
Great quality of Service ,faster and convenience way to pay at most. Thank you for your Service to my Healthcare Facility .
Quick and easy!!!!
Terry
1701319042
Great service! Easy process and very informative representative. Andrea was great and very patience with our process. I would recommend using them!!
Terrance R.
1700848536
Always and easy process. Thanks!
Gerald S.
1700244544
Renewal was quick and easy online
Angelita K.
1699752900
I had a great experience working with Andrea from BizInsure. She was extremely knowledgeable, helpful, and responsive throughout the entire process. She guided me through the different options available and helped me find the perfect home care professional liability insurance policy that suited my needs. Her professionalism and expertise made the entire experience smooth and hassle-free. I highly recommend working with Andrea and BizInsure for all your insurance needs.
Juliette S.
1699032636
Easy to submit an application and to get quotes
Simone S.
1698775217
I had the most pleasant prompt and professional experience of my life with Bizinsure. Everything was completed in record time, at an unbelievable cost…and my certificate of Insurance was promptly emailed to me. Most of all it was effective immediately. No hassle no back & forth, just great service highly recommend to all small businesses.
Marcia S.
1698407456
Excellent
advanced U.
1697824466
Great service. Very professional and cordial. Thanks
Jeremiah U.
1697064641
BizInure has been a great company for our insurance needs. I wish customers services was 24/7, that would make it a five stars
Novilette L. J.
1696828014
Easy to navigate what you need. Always notify ahead of renewal!
Athena T.
1696646371
js_loader
Google Rating
4.7
Based on 241 reviews
×
js_loader