If your business provides advice or service to clients, you know that mistakes can happen. Protect your business from claims of negligence with errors and omission insurance. We’ve evaluated the best errors and omission insurance providers based on coverage, financial stability, customer satisfaction, and overall quality.
Coverwallet began its journey in New York City in 2015 operating under the
Aon Insurance banner. At Coverwallet, you can access everything you need to
keep your company well-protected at an unbeatable price.
With a 100-year history of insuring businesses, Hiscox is well-known across
America and globally. With more than 500,000 small business customers,
Hiscox is fully aware and trained in the unique risks a business can face.
Thimble provides business insurance that can be tailored to your business by
the year, month, day, or even the job. At Thimble, the process to getting
the right business insurance is simple, scalable, and flexible.
Errors and omissions (E&O) insurance is a type of professional liability coverage. It protects companies from claims of negligence or unsatisfactory work, and it can help cover the legal fees – whether you are at fault or not. Another example is if you miss a deadline for a shipment, which causes your client to lose money, E&O insurance can cover the cost of damages.
Who needs errors and omissions insurance coverage?
Anyone who provides advice or service to clients requires should consider E&O insurance. This includes (but is not limited to):
Financial advisors
Lawyers
Doctors
Insurance agents
Wedding planners
Real estate agents
Home inspectors
Contractors
Even if your company did not do anything wrong, the costs of legal fees in the event you are sued can still be enough to cause a financial burden.
What does errors and omissions insurance cover and exclude?
E&O insurance coverage can be divided into four primary areas:
Accusations of negligence: If you or any employee in your organization fails to adhere to industry standards, a client could accuse you of negligence and sue you.
Work mistakes and oversights: Even small mistakes can have detrimental effects on your business. Failure to inform a client of regulation can have huge negative impacts on them, which you could be held liable for damages.
Undelivered services: Failure to deliver a product, complete a service, or fulfill a business contract can cause your client to suffer lost revenue and could to sue your business for loss of money.
Missed deadlines: If your business fails to deliver a product or a service by a predetermined deadline, your client could have suffered lost income or revenue due to not having the product in time.
The date the policy was enacted, and the date of the incident can affect coverage under E&O insurance. Two important numbers are the retroactive date and the extended reporting period. E&O insurance only helps cover claims if they are reported within the appropriate time frame and occurred on or after the retroactive date.
Retroactive date: This is the date you are covered after. Incidents that go back prior to this date may not be covered.
Extended reporting period: Claims may only be covered if they are reported in a certain timeframe, often 30 to 60 days. This timeframe can be extended to a year for an additional cost.
There are certain areas that are not covered by E&O insurance, including:
Illegal acts and intentional wrongdoing to your customers
For bodily injury or property damage, you’ll need a general liability insurance policy.
You will need a workers compensation policy to cover employee injuries or illnessess.
Discrimination or harassment in the workplace.
You will need cyber security insurance to cover data breaches
What are the limits of errors and omissions insurance?
The limit for a smaller business with assets under $1 million is typically around $1,000,000 in coverage per claim. Larger businesses frequently carry $5,000,000 to $10,000,000 in coverage.
How much does errors and omissions insurance cost?
Many factors go into determining the cost of your policy and the amount of coverage. Several factors include (but not limited to):
Location
Industry
Type of work performed
Previous litigation claims
Average costs for E&O coverage are usually $500 to $1,000 per employee, per year.
How to choose the best errors and omissions insurance?
When looking for the best E&O insurance, here are some key factors to consider before you make a purchase:
Read the fine print: Mistakes can be costly. You should read the terms and conditions to ensure that you take out adequate coverage for legal proceedings. Be aware of any exclusions that can apply to your specific policy. This can help to avoid rejection when filing an insurance claim, and finding out that your business is not covered.
Compare costs: Looks at the premiums and deductibles versus the coverage of multiple plans. Determine how much coverage you need, and what you can afford to pay for that coverage.
Customer feedback: Look for postive customer feedback on your insurance provider to ensure they have your best interests.
