Errors and Omissions Insurance

What is Errors and Omissions Insurance?
Errors and Omissions Insurance is also known as E&O Insurance or Professional Liability Insurance. This is protection purchased by a company or individual to insure them from claims arising out of an error in their field of commerce or profession. These errors are brought to light when they cause personal or financial harm to another party. Errors and Omissions Insurance is distinct from Commercial General Liability Insurance, which specifically excludes losses due to professional errors.

What does Errors and Omissions Insurance cover?
Although Errors and Omission Insurance provides protection for many types of Florida businesses and professions, the coverage itself is limited in scope to professional error. A general example of an E&O claim would be a lawyer who provides advice to a client on a specific transaction. If this advice eventually led to client harm, then any damages resulting would be covered by the E&O policy. Some of the more common professions who utilize E&O coverage are:

  • Lawyers
  • Accountants
  • Architects
  • Technology Professionals

What are additional coverage Options?
Florida Error and Omissions insurance policy options vary from carrier to carrier, as well as between industries. Some of the more common options are:

  • Prior Act Coverage – Provides coverage for losses occurring prior to current policy date, in which claim notification is received during current policy period.
  • Extended Reporting Period – Extends claim reporting period for a designated amount of time following policy termination.
  • Spousal Coverage – Extends coverage to insured party’s spouse in the event that s/he is named in any legal action or claim resulting from a covered professional loss.

Is Errors and Omission Insurance mandatory?
In most cases the State of Florida does not mandate Errors and Omissions Insurance. However certain governmental and professional licensing boards require that a professional or business applying for a license carry such a policy. In addition, many industry relationships are dependent on the individual professional or business obtaining E&O Insurance.

Are discounts available in Florida for Errors and Omissions Insurance?
While not all discounts are applicable in every industry or to every applicant, the following are some of the more common discounts:

  • Professional Group Discount – Joining a professional group (e.g. when a lawyer becomes a member of the American Bar Association) often entitles the applicant to a discount.
  • Loss Free Discount – Many companies will assign a discount to an applicant with a clean claims record.
  • Deductible Discount – By assuming a larger policy deductible, the applicant will typically be eligible for a discount.