Professional Liability Insurance
What Is It?
Errors and Omissions insurance(E&0), also known as Professional liability coverage, is a type of liability coverage that protects professionals providing advice or service as part of their industry. Errors and Omissions provides coverage for defense and damages awarded in a civil lawsuit caused by an error or omissionfrom a product sold or service provided, alleged failure to perform on behalf of the claimant and any resulting financial loss caused by the error. A standard general liabilty policy issued to a business would not provide coverage for this type of claim. Errors and Omissions does not cover for criminal prosecution.
Why Is It Important?
Errors and Omissions policies can be required by some professions such as doctors. In this case it is referred to as malpractice insurance. It is typically required for certain professions such as insurance agents, brokers, lawyers,consultants, engineering, architecture firms and also some charities. Errors and Omissions coverage is important becuase the general liability policy will not cover for misrepresentation, negligence, violation of good faith or inaccurate advice.