Errors and omissions insurance is a type of insurance policy that is designed to protect companies, employees, and others against accusations and claims of negligent actions or incomplete work. It is designed for any business or professional that provides a service, including, but not limited to, lawyers, doctors, financial service professionals, wedding and event planners, and insurance agents. It does not cover illegal actions or other damages that would generally be covered by different insurance policies.
How E&O Insurance Works
Errors and omissions insurance is a type of professional liability insurance. This E and O insurance cost is worth it since it will protect companies, including tree service companies, against any claims made by clients relating to professionals who provide consultancy, service, or advice. It is a popular type of business insurance for companies that offers protection if clients accuse them of making errors or mistakes. In particular, the tree care industry has tree service insurance to protect companies. Find out more about the E and O insurance cost here.
Why Get E&O Insurance?
Companies will often get E&O insurance if they charge a fee to provide any kind of service for a customer. Errors and omissions insurance is generally provided by most major commercial insurance providers. It is not usually included in other insurance policies such as homeowner’s insurance policies, therefore, businesses operated from a home office will need to get it separately.
What is covered by E&O insurance and the benefits that it provides will vary based on the policy and the insurance company that it is issued by. In general, E&O insurance will cover mistakes, oversights, or errors that occurred when the work was carried out, professional negligence, failure to meet deadlines or deliver certain services that a client or customer has been promised and a breach of contract.
What’s Not Covered?
E&O insurance policies generally don’t cover instances of criminal prosecution, along with other liabilities that may not be covered by some policies but may arise in civil court. This usually includes intentional wrongdoing, illegal acts, and other criminal actions. Along with this, errors and omissions insurance will not typically cover instances of bodily injury or harm inflicted by a business, as this is usually covered by a general liability insurance policy. Your E&O insurance policy also will not cover cybercrime-related information leaks, temporary employees, discrimination claims, and employee injuries, as these are typically covered by other insurance types.
Who Needs Errors and Omissions Insurance?
This kind of liability insurance is generally necessary for businesses that provide a professional service or advice. Without E&O insurance, your business could be held liable for millions of dollars in damages, along with legal fees. E&O insurance is recommended for any business in the financial industry, and other companies including general maintenance contractors and companies, engineering companies, nonprofits, and all other professionals or businesses that provide a service or advice.
If you are starting or running a business that provides a professional service, errors and omissions insurance is worth getting for your peace of mind.