Professional Liability Insurance - E&O

What is Professional Liability Insurance?

Professional Liability Insurance covers individuals who provide professional services, such as physicians and lawyers, from losses they incur as a result of being held responsible for the losses of their clients.  This could result from claims of malpractice, error, or mistake committed or alleged to have been committed by the insured in his professional capacity.  See Errors and Omissions - E&O

Professional liability insurance is one form of protection for professionals and for their clients.  Coverage will shield personal assets and will help maintain a good reputation through the defense of allegations of wrongdoing which might be frivolous or false.  For the client who has suffered some damages through the actions of a professional, liability insurance will ensure that there are adequate funds available to make amends for the wrong that has been done.  A professional liability policy covers errors, omissions or negligent acts which may arise from the normal or usual duties carried out by the insured.  When the professional is an employee of a firm, the firm, as the employer, is responsible for the actions of the employee.  However, a court of law may find a professional personally responsible for an incident that occurred due to an error, omission or negligent act committed by the professional as an individual.  

What is Errors and Omissions Insurance?

Errors and Omissions is part of a professional liability insurance policy in most cases.  This insurance covers damages caused by mistakes (errors) made by the professional or damages caused by something the professional failed to do (omissions).  Regardless of what kind of business you own, customers can claim that something you did on their behalf was done incorrectly, and that this error cost them money or caused them harm in some way. 

Professional, semi-professional and serviced type of work may place an obligation on the part of the individual to see that the task is properly performed. Any error or omission in the performance of a particular duty may make the individual responsible in damages. Errors and omissions insurance is designed to protect the individual in such a situation.