Errors and Omissions
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What is Errors and Omissions Insurance?
Errors and Omissions insurance (E&O), a form of professional liability insurance, is designed to protect employees and employers against clients' claims of negligence or inadequate work.
E&O policies usually cover legal costs associated with the claim and most or all of the ensuing settlement, though a policy may not cover the entire settlement if the amount exceeds the limit specified in the insurance contract. In many industries, lawsuits happen whether the associated claims are legitimate or not. For example, a graphic designer is sued after creating a trademark that another business claims is similar to their trademarked logo. Court costs are normally high even if the claim is baseless and ends in the defendant's favor. In such a case, E&O insurance could financially protect the graphic designer during a costly legal battle.
View our quote examples to understand how much errors and omissions insurance costs.
Who needs Errors and Omissions Insurance?
E&O insurance is useful whenever you or your employees provide a service that a client could claim is inadequate or tied to negligence. For example, if you are a real estate agent, you may find yourself facing a lawsuit if a homeowner finds defects in their new property after closing. This homeowner may allege you did not disclose the defects and try to collect based on the diminished value of the home.
To illustrate another example, imagine that you are hired as a branding consultant to help revive a struggling company. If the innovative techniques that you employ are not enough to keep the business open, the company’s owner may try to blame you and file a lawsuit.
No matter how baseless both claims are, they can tie you up in legal fees –something that can be avoided with the purchase of an E&O insurance policy.
Even if you already own a Business Owners Policy, you are not protected from lawsuit-related costs. E&O insurance is necessary for proper protection against professional liability claims.
Example professions we insure
Is E&O Insurance Legally Required?
While not all types of businesses are required by law to carry this coverage, some professionals are required by regulatory or licensing boards within their profession to have it. In more than 10 states, for example, real estate agents are required to show proof of E&O coverage before they receive their licenses.
While local or state laws may or may not expressly require some types of professionals to carry E&O coverage, other laws regarding their duty of care to clients make it a necessity. Additionally, you should seriously consider errors and omissions coverage if your business provides a professional service or regularly gives advice.
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
Errors and omissions coverage can 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.
What your Hiscox Errors and Omissions Insurance 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.
Learn more about Errors and Omissions Insurance
Get Liability Insurance that best meets your needs
Errors and omissions insurance will not protect your business from everything. For example, it will not provide coverage for another person’s claims of bodily injury. Some people purchase additional business insurance products including:
Why choose Hiscox?
With E&O insurance, you can strengthen your company's reputation by demonstrating that you are well-prepared and risk-averse. E&O insurance also shows that you have high standards and hold your workers to them as well. In addition, it shows that you realize the potential for human errors and care enough about your company to protect it in the event of a mistake. Although many professionals never have to file an E&O claim, having the policy provides valuable peace of mind.
Hiscox offers E&O insurance for many industries in addition to commercial general liability and Business Owners Policies. If there is a possibility of your company being accused of performing poor work or being negligent, you can request a quick E&O premium quote by selecting your profession and state here or speaking to one of our knowledgeable representatives.
- Flexible payment options: We offer you the option of making monthly payments (with no additional fees) to help you manage your cash flow.
- Tailored insurance: We specialize in businesses like yours and tailor coverage to the risks in your field.
- Claims responsiveness: When a covered claim is reported, we will immediately defend you even if the claim has no basis and, if necessary, appoint an attorney.
- Coverage for contracts: Our liability insurance coverage satisfies most standard contract insurance requirements.
- Worldwide coverage: We protect you for work done by your business anywhere in the world, as long as the covered claim is filed in the United States, a U.S. territory or Canada.
- Passion for service: Agents knowledgeable about your business concerns will provide you with excellent service – 4.7/5 of people surveyed recommended us.
Get a fast, free quote now and get that Hiscox confidence behind your business. If you prefer, you can call us at 1-866-283-7545 and speak with a Hiscox licensed agent, Monday – Friday, 7am – 10pm ET.
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.