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Frequently Asked Questions - Errors and Omissions

Review our E&O insurance FAQ for complete answers to your errors and omissions questions.

What is errors and omissions insurance?
E&O insurance is a form of professional liability coverage that supplements your businessowners policy (BOP). It covers losses and legal expenses resulting from client lawsuits, claiming that you made errors or acted negligently in the performance of your professional duties. E&O insurance also can be used to fight slander, libel, and breach of contract.

Specialized forms of errors and omissions insurance are available for a variety of licensed professions, including accountants, architects, bankers, contractors, engineers, home inspectors, insurance agents, information technology professionals, lawyers, real estate agents and appraisers, notaries, and many others.

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How do errors and omission policies work?
E&O policies typically have a claim limit and an annual limit, based on the policyholder's liability exposure. The claim limit is the maximum that will be paid for any single event, while the annual is the maximum that will be paid in any one year. Typical errors and omissions insurance claim limits range from $250,000/$500,000 to $2,000,000/$4,000,000.

What are the benefits of Errors and Omissions insurance?
E&0 insurance safeguards your business from catastrophic loss in the event of a client lawsuit, covering both legal expenses and judgments against you. Remember even baseless claims against your business can require a legal defense. Protecting your business's reputation can require significant funds and can even bankrupt your business. Avoid this unfortunate reality by investing in errors and omissions insurance.

How do I purchase E&O insurance?
Use the Internet to request errors and omissions insurance quotes online. Often prices for similar errors and ommissions policies from different carriers will vary.

E&O insurance is a serious investment. Select highly rated providers graded "A" to "AAA" by companies such as A.M. Best and Standard and Poor's. Carefully consider your professional liability exposures before selecting a E&O insurance policy. There are many industry-specific and specialized forms from which to choose.

What is insurance agents' errors and omissions insurance?
E&O insurance for insurance agents and brokers provides protection against the following common client claims: that the customer was unfairly denied coverage, provided inadequate, inappropriate, or financially unsound coverage, or not properly informed about coverage changes, limitations, or termination.

What is home inspectors' errors and omission insurance?
Home-inspector E&0 insurance covers losses and expenses generated by client claims of error, omission, or negligence during the inspection of a residential property. Most suits against home inspectors result from property liabilities that were not properly documented or visible at inspection.

What is real estate agents' errors and omissions insurance?
Real-estate agent E&O insurance covers losses and expenses generated by client claims of error, omission, or negligence during the listing and sale of a residential or commercial property. Failure to negotiate a sale and misrepresentation of a property's physical condition are the most common causes of suits against real estate agents and realtors.

What is appraisers' errors and omissions insurance?
Appraiser E&O insurance covers losses and legal expenses generated by client claims of error, omission, or negligence during the appraisal of a residential or commercial property. A common cause of appraisal litigation: misappraisal, particularly, the undervaluing of a property. This can be due to appraiser error or a general decline in property values.

What is notaries' errors and omissions insurance?
E&O insurance for notaries covers losses and legal expenses generated by client claims of error, omission, or negligence during the notarizing of important documents, such as contracts and deeds. Many suits against notaries are the result of individuals falsely identifying themselves through signature forgery and false identification, leading to notary error.

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