Errors and omissions (E&O)

Errors and omissions insurance responds when a client says your work or advice, or something you failed to do, cost them money. It is the common name for professional liability coverage outside medicine: consultants, insurance and real estate agents, IT firms, accountants, marketing agencies, architects. An agent who forgot to add a driver, a software firm whose bug halted a customer's operations and a consultant whose forecast was wrong are all E&O exposures. The policy pays defense and covered damages up to the limit.

Nearly all E&O is written on a claims-made basis. The claim must be made during the policy period or an extended reporting period, and the wrongful act must fall after the retroactive date. Switching carriers or letting a policy lapse can leave earlier work uninsured unless you buy tail coverage.

It is not a substitute for general liability. A CGL covers bodily injury and property damage and excludes professional services, so each policy answers a different claim. E&O typically excludes intentional acts and promises or guarantees of results, and defense costs usually sit inside the limit.

Professional liability (E&O) insurance explained covers the policy in depth, and E&O vs general liability: what each one covers sorts out which policy responds to which claim. tail coverage explains what happens when you retire or switch.