Errors and Omissions Insurance

Everyone makes mistakes, don’t let forgetting to securing professional insurance be one of them.

Professional coverage for everyone

Errors and Omissions (E&O) insurance, also referred to as Professional Liability Insurance, covers the legal costs, fines, penalties, settlements, and judgments associated with allegations of misrepresentation, breach of professional services, wrongful business practices, misleading advice and conflict of interest that may happen due to mistakes made during the course of providing your professional services.

Like a well tailored suit

ZRM offers a range of tailor-made Errors and Omissions insurance policies that cater to the specific needs of each professional, taking into account their business’s size, industry, location, risk base, and desired coverage limits. Underwriting looks at the specific nuances of your operation to assure proper coverage during every meeting, proposal, and client interaction. Industries covered by ZRM include:

  • Accounting
  • Architecture
  • Creative
  • Dental
  • Engineering
  • Financial
  • Legal
  • Medical
  • Media
  • Technology

Mistakes happen when you least expect it

This is why having an errors and omissions policy from one of the nation’s leading insurance carriers is essential for smart business owners. Should you provide a service or offer a client advice that they claim backfired, your errors and omissions insurance will back you. In each of the cases below, E&O insurance covered the liable business and financed defense costs, settlements and regulatory penalties. Take a moment to review the following E&O professional liability claim examples:

Security incidents and data breaches may cause your clients to file a lawsuit against you. Clients could cite an improper network configuration, a bad software recommendation, or other issues with your work.

If your company makes a false statement to secure a contract, the client could sue you for a claim of misrepresentation. For example, if your sales agent offered a quote for services but failed to disclose any additional fees that you might charge during the course of a contract, the client could sue and successfully hold you liable.

Generally, negligence lawsuits are triggered by a lack of proper attention leading to mistakes. If you neglect to exercise due care and make an error that detrimentally impacts a client’s business, they could sue you for negligence. For instance, if you create a website with functionalities or security holes, the client may start a suit against you.

Missing a deadline can be a costly mistake for any business. Even if the delay was due to an outside factor, such as an unreliable contractor, computer virus, or supply chain disruption, clients may still sue you for not meeting the agreement. This is why it’s important to have Errors and Omissions (E&O) insurance in place.

What is the best E&O Liability Policy?

The best E&O insurance policy is one that’s custom tailored to your organization. This policy protects you from specific actions in your course of business so this is not the time for a “one size fits all” solution. Let’s work together and secure peace of mind.

E&O Insurance FAQs

E&O insurance, also known as professional liability insurance, protects professE&O insurance, often referred to as professional liability insurance, is a type of coverage that protects those offering professional services – from a consulting firm with many employees to a single-owner sole proprietorship. It covers any costs associated with claims linked to mistakes or negligent acts committed while providing services.ional services firms from claims of errors, omissions or negligence.

E&O insurance covers damages and settlement amounts paid to claimants, as well as the costs of defending against a claim. Even if the claims made against an insured are without merit, E&O insurance will still be valuable protection, as it can cover the often-substantial costs of legal defense and related investigation expenses. Nevertheless, keep in mind that the coverage is subject to the specific policies and exclusions of the insurance.

  • Liability or defense costs in the event of bodily injury or property damage to third parties
  • Issues involving alleged discrimination or wrongful termination with current, former or prospective workers
  • Work-related injuries to employees
  • The expenses of dealing with a data breach.

No single type of insurance covers all possible risks that could affect a business and the same is true for errors and omissions (E&O) insurance. While it provides coverage for critical professional liability risk areas, there are certain types of claims it will not cover. These can include:

  • Liability or defense costs in the event of bodily injury or property damage to third parties
  • Issues involving alleged discrimination or wrongful termination with current, former or prospective workers
  • Work-related injuries to employees
  • The expenses of dealing with a data breach.

To determine how much errors and omissions insurance you need, one must take into consideration potential liability exposures, the frequency of possible claims, and the cost of the insurance. Deciding upon the correct amount of E&O insurance requires careful thought. For many organizations, working with a trusted advisor who can provide helpful advice about evaluating risk, comparing insurance policies, and understanding the difference between a perfect and a practical solution will be invaluable.

In a nutshell, E&O insurance is essential for any business which serves clients and offers expertise-based services. More precisely, some professions such as attorneys, doctors and accountants that require certification may be obliged to get professional liability insurance before engaging in their  professional activities.

Directors and Officers (D&O) insurance is intended to protect the most senior officials of a company, typically covering claims against them related to their decisions as a leader. Typically, the claimants in such cases are those with a financial interest in the company, such as shareholders. Potential claims could involve negligence when it comes to following certain laws or a lack of protection from cyberattacks. There is rarely overlap between E&O and D&O because the claimants in a D&O suit must have an invested interest to sue the director or officer for their mistakes in running the company. Although a customer may have suffered harm due to the company’s mistakes, they do not possess the same claim as shareholders do. Regardless, the customer may still take legal action which would be covered by a general liability or E&O policy instead of a D&O policy.

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