Errors and omissions insurance is a type of product liability insurance covering professionals in the business field against claims arising from errors made during professional services. The definition can be confusing when you first come across it, so let’s break it down.
Errors and omissions coverage protects professionals from claims arising due to clerical mistakes or faulty judgment on their part, which lead to damages such as financial loss or injury. It also includes wrongful acts, including failure to perform according to agreed standards, resulting in injuries such as financial losses or physical harm.
Professional services insurance is different from other types of liability coverage. Instead of covering a company or individual for negligent behavior, this type of coverage protects professionals who make mistakes while providing their service to clients.
It is also important to note that errors and omissions policies are not required by law but have become increasingly popular as lawsuits involving these types of mistakes have increased significantly over time.
Professional services insurance is designed for professionals who work in fields like architecture, engineering, or investment banking. Errors and omissions insurance is designed to cover professionals for mistakes they may make while providing their service to clients.
Errors and omissions insurance can provide a cushion of protection to cover the costs and expenses associated with defending against errors that have already been made or for anticipated errors in the field.
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