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Why do I need errors and omissions insurance?
Hiscox errors and omissions insurance coverage, also known as professional liability insurance, provides protection for your professional services business from claims of negligence or failing to perform your professional duties.
What is covered?
- Defense costs
- Alleged or actual negligence
- Temporary staff and independent contractors
- Claims arising from services provided in the past
- Claims and damages
- Personal injury (e.g., libel or slander)
- Copyright infringement
What is not covered?
- Employment matters
- Fraudulent acts
- Bodily injury or property damage
- Personally identifiable information
- Patents and trade secrets
- False advertising
- Other services
Your errors and omissions insurance policy covers claims of:
As a small business owner, an action or recommendation that causes a negative outcome for a client can result in a lawsuit and subsequent legal defense costs. Negative client outcomes that may lead to legal action include financial loss, character damage, and discrimination. Even if there’s no actual wrongdoing on your part, legal defense costs related to a lawsuit can become a significant financial burden on you and your business.
We’re here to protect you. In the event of a covered claim, Hiscox will defend you with speed, professionalism, and expertise. We’ll guide you through the full legal and insurance processes related to the claim, remaining readily available all the way to resolution. When necessary, we’ll appoint an attorney to represent you and even pay for any supplemental costs that may come about if you need to attend an arbitration proceeding in defense of a claim prior to it going to trial. By mitigating risk and providing peace of mind, we allow you to focus on growing your business.
>Defense costs can become an issue for businesses across many industries. However, an insurance policy that covers legal defense costs may be a particularly good fit for those who work in management consulting, process serving, property management, or real estate.
Alleged or actual negligence
We strongly recommend obtaining errors and omissions coverage to protect your business from claims that allege negligence. Negligence takes place when a company or individual fails to show reasonable care in their actions, resulting in harm to another party. As a provider of services, your business is responsible for what is known as “duty of care.” Making mistakes, failing to deliver work on time, omitting information, or providing incorrect advice while in the process of rendering your professional services may be considered a failure to uphold this duty of care. Harm or loss can take a variety of forms, including economic loss, psychiatric illness, or harm to property. When someone is harmed or suffers loss because of a company’s negligence, they may have the legal grounds to seek compensation.
Errors and omissions coverage from Hiscox will keep you protected in the event of negligence allegations. Your policy will cover the expenses related to, as well as relevant damages that may result from, the claim.
Negligence claims may take place in a variety of scenarios across many business categories. However, professionals who may be well-suited for protection include designers, project managers, massage therapists, medical billing employees, and public notaries.
Temporary staff and independent contractors
If you’re a small business owner, we understand that there are distinct financial and operational benefits to hiring independent contractors and temporary staff members. As workload fluctuates, having extra help during the busy times can make a huge difference in terms of allowing your business to deepen relationships and expand. It’s important, however, to recognize that, even in the case of temporary and contract employees, any alleged wrongdoing or error that a staff member commits can still result in your business being sued.
In cases in which you’re being sued by a client due to the actions of a temporary or even fulltime employee, Hiscox can step in to protect you and your business against claims. By obtaining errors and omissions insurance, you can hire with confidence and avoid unexpected legal expenses down the line. A policy with us means we’re behind you for every staffing decision.
Issues related to temporary staffing can take place in many industries. Businesses that operate in information technology, human resources, customer service, accounting, or computer programming should all consider obtaining
Claims arising from services provided in the past
Claims can be made against an individual or business well after work has been completed on a project. This can be a challenging situation, as very few insurers are willing to cover unknown claims that may have been generated from services that a business provided prior to signing up for their policy. In the case of most errors and omissions insurance carriers, coverage begins on the policy purchase date.
But when you choose Hiscox, we can, in some cases, provide retroactive coverage all the way back to the inception of your business. For art therapists, acupressure service providers, audiologists and many other professionals, our errors and omissions coverage may be able to use the begin date of the business as the retroactive date of coverage if there are no existing claims or circumstances that could result in a claim.
Claims and damages
In a claim for damages, an award (usually in the form of money) is paid to a person or organization as compensation for a loss or injury. Types of loss that may result in compensation include loss of earnings and non-monetary loss, such as pain and suffering or emotional distress.
As a small business owner, it’s in your best interest to obtain errors and omissions insurance coverage now to avoid dealing with the financial impact of a potential large claim in the future. At Hiscox, our E&O policy covers claims for monetary damages, as well as non-monetary relief. Where law allows, this includes up to $250,000 of punitive damages. Coverage could make a key difference in your business’s long-term financial stability.
Claims for damages can manifest in many ways and across virtually all professions. A marketing consultant, for example, may be sued for failing to generate a promised number of leads during a campaign. Likewise, a researcher may be sued for incorrectly assembling a family’s genealogy, or an IT consultant may face a claim for installing software that led to a security breach and loss of intellectual property. Medical billing specialists, event planners and claims adjusters can also commonly encounter claims.
Personal injury (e.g., libel or slander)
Libel and slander are forms of personal injury because they can cause damage to a person’s character and result in them suffering financial losses or other difficulties. Slander takes place when a false claim is made orally, while libel refers to false remarks that are made in writing. When directed at you or your business, claims of libel or slander can have a negative impact regardless of whether they’re even valid. An accidental slip-up in a conversation or saying something untrue of a person or business in an email to a colleague could result in having to deal with a claim and subsequent legal expenses.
Hiscox errors and omissions coverage protects you against personal injury claims that may arise while performing your professional services. We work to make sure you can operate free from exposure to financial penalties from a lawsuit, allowing you to focus on running your business.
Claims of libel and slander can affect businesses in nearly any industry, as there is potential for defamation in all communications and social interactions that take place with a client or between employees.
Copyright infringement takes place when works that are protected by law are used without the permission of the copyright holder. Even if your business does its best to comply with intellectual property laws, there still exists the possibility of mistakes, misunderstandings, and oversights. It’s instrumental to your success to obtain coverage for these claims in advance.
At Hiscox, we offer customized errors and omissions insurance to address your specific needs. Depending on the industry in which your business operates, there may be a lesser or greater potential for copyright infringement issues.
As an example, IT consultants may run the risk of a lawsuit due to allegations that their code was taken from another developer’s program. For most professionals in this industry, we offer coverage of up to $200,000 to address claims expenses and damages. Similarly, we offer coverage of up to $200,000 for marketing consultants who may encounter alleged infringement related to the copyright or trademark of a third party. In some situations in which there are no existing claims or circumstances that could lead to a claim being filed, we’re also able to apply retroactive coverage dating back to the start date of a business.
Protection from copyright infringement is a smart choice for most businesses, but it may be particularly helpful for those who work as advertisers, media consultants, graphic designers, or market researchers.
Worldwide errors and omissions insurance coverage
At Hiscox, we believe your insurance should follow you wherever your business takes you. Our E&O insurance covers claims arising from work you do anywhere in the world, as long as the claim is filed in the United States, its territories or Canada.
Your Hiscox errors and omissions policy doesn’t cover:
We want our customers to fully understand what they are buying. Below is a summary of some of the key exclusions of your errors and omissions insurance policy. For complete details of all the exclusions, please read the policy wording.
Your policy doesn't cover your business for claims alleging any improper employment practices committed against your employees or for any workers’ compensation claims or employer's liability claims.
We won’t cover any fraudulent, dishonest or criminal acts. However, we’ll defend these actions until they’re proven to be fraudulent, dishonest or criminal by proper process in court. If this happens, we’ll kindly request that you reimburse us for those costs.
Hiscox errors and omissions insurance doesn't cover damages or claims expenses for third-party injuries (slip and falls) or damage to someone’s property. To protect your business from these risks, please see our general liability insurance coverage page.
Your errors and omissions insurance coverage policy does not cover your business’s failure to protect any personally identifiable information in its care, custody or control.
Your policy does not cover your business for any claims that allege an infringement of a patent or theft of a trade secret.
Your Hiscox E&O insurance policy does not cover you for any false advertising claims.
We don’t cover any services you perform not specified by the services endorsement attached to your policy. Your policy will also not cover any medical, nursing, insurance broker/agent, legal, actuarial, architectural or engineering services, regardless of your occupation.
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Hiscox Customer Reviews
Mark, Columbus, Ohio
“Excellent service by Hiscox”
Fast quote for my new small business.
Connie, Scottsdale, AZ
“Best Price I Found, Quick and Easy Process”
Used them before and had no problems. Had the best price for what was offered. Very easy to maneuver the site and the process was very quick.
Jacob, Florence, KY
“Making the complex easy”
It was relatively easy to work through the application and funding process. Had looked at another carrier, and was disappointed at the complexity
Shannon, Dallas/ Ft. Worth Area
It was easy and the agent we spoke with was very personable and knowledgeable. She made the process simple and straightforward.
Brandi, Lakeland, Florida
Made it very easy to obtain all I needed for my professional and personal liability insurance. Quickly got all my certifications for my different locations, couldn’t be happier
K. Henry, Seattle, WA
“Easy Process and Good Pricing”
I recently bought E&O insurance for a consulting business I started. The process was very easy to follow and didn't take much time. I had the E&O insurance I needed immediately. The pricing was extremely competitive. I also ... verified Hiscox's A.M. Best Rating. They were given a solid rating.
This information is provided to assist you in understanding the coverage we offer and does not modify the terms and conditions of any insurance policy, nor does it imply that any claim is covered. Coverages are subject to underwriting and may not be available in all states.