E&O insurance is a form of Professional Liability Insurance that is purchased by companies and professionals. This type of policy is designed to cover the business or individual when a client claims they did not get results promised from the service you provided, or they suffered damages as a result of your service or advice.

Errors and Omissions insurance is usually carried by professionals such as accountants, architects, engineers, and any field where services and or advice is offered for a fee. This extends to many professions including but not limited to fields such as financial advisors, commercial printers, event planners, travel agents and any business with exposure to errors and omissions.

Most policies of this sort will cover settlements and unfavorable judgements, as well as legal defense costs. Financial losses for a client can add up to an expensive claim in many industries, and a good errors and omissions policy is worth buying for many businesses.

Imagine a travel agent or wedding planner puts together a $50,000 wedding and honeymoon for a client and list of 100 VIP guests on a tropical island. What happens if the hotel rooms are booked for the wrong date and the guests have nowhere to stay when they arrive? Do you think a ruined wedding and honeymoon could result in a lawsuit for this travel agent? Can you put a price tag on a lifetime event such as this? My guess is the client could, and I have a feeling it could go well over the $50,000 invested! This business had better have errors and omissions insurance.

Remember, claims like that are not covered under many other business liability insurance policies. Without E&O insurance, this business might have to pay for everything out of pocket, including any judgement or settlement that may arise from the claim. And even if the business or professional is found NOT to be responsible for the mistake, the legal fees to protect themselves could be quite expensive. Errors and Omissions coverage can pay for legal defense fees as well.

One final reason to consider errors and omissions policies is that it makes for a good selling point when trying to land new contracts. When potential clients see that you are fully covered with E&O insurance they will have the comfort of knowing that there is recourse should something go wrong.

Getting errors and omissions insurance quotes from multiple insurance providers is a good idea. Underwriters will need detailed information about your business so they can evaluate the risks in your industry and give you an accurate quote. Remember, no two businesses are the same and there is no one-size-fits-all E&O insurance policy. That\’s another reason why it is so important to get multiple quotes and compare policies side by side. Just be sure to pay close attention to details such as policy limits and exclusions before buying coverage for your business.