Why Do Professionals Need E & O And General Liability Insurance?

If you own your own business, you understand how important it is to carry a comprehensive insurance portfolio. Failing to carry the right types of insurance can lead to costly claims and lawsuits. In today’s litigious society, small business owners and professionals in all industries can never be too careful. The standard Business Owners Insurance package plan offers building, property, and general liability insurance. If you carry Business Owner Insurance and you are not carrying errors and omissions insurance you could be leaving yourself and your business vulnerable to potential claims. Understand the difference between each liability insurance policy and determine whether you are covered adequately.

General Liability Insurance

General Liability Insurance is required in each state that requires business licensing. This type of coverage is designed to protect your personal and business assets in the event you are sued for negligence causing injury to a person or damage to a person’s property. The standard general liability policy includes $300,000 in general liability insurance. This coverage will also cover the business for advertising injury, slander, false advertising, and libel.

While general liability insurance does provide coverage for several different liability exposures, it also comes with exclusions. Errors and omissions are specifically excluded in the coverage of a general liability policy. If a business owner were to file a claim resulting from an error they made in the course of doing business, the claim would be denied. This is why there is a need for errors and omissions insurance.

How is Errors and Omissions Insurance Different?

Errors and Omissions insurance is a specialty policy that is tailored to the profession of the insured policy. Not all business owners have a need for errors and omissions insurance. If you provide professional services to your company and you have received training or continued education to provide the service you may need coverage. The most common professionals that have a need for e & o insurance include real estate agents, insurance agents, contractors, doctors, financial consultants, IT technicians, personal trainers, counselors, and more.

E&O insurance will provide coverage for the professional if the customer claims the professional made an error or omitted information leading to a financial loss. This coverage is excluded in a general liability policy. The policy will pay for defense costs, settlements, and judgements up to the limits stated on the policy. The cost for defense alone could drain your bank account.

All professionals offering services rather than products should carry errors and omissions insurance. This optional form of coverage will protect not only your business assets but also your company’s reputation. Do your homework, obtain quotes from respected commercial broker, and bind coverage. You will have peace of mind in knowing you are covered for all potential lawsuits that may arise.


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