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Errors and Omissions Insurance
E & O (Errors and Omissions) Basics
E & O protects against claims by customers that a company made mistakes or failed to perform contractual work. It should include coverage of the costs of legal defense. It is also known as professional liability insurance. It insures mistakes made by a company’s owners, employees and contractors. It is similar to a doctor’s medical malpractice insurance.
Who Needs It?
So, who needs it? ...Anyone who advises, recommends, consults or designs solutions should consider this coverage. Firms involved in providing technology and software as well as companies involved in mergers and acquisitions are particularly at risk of litigation. Traditionally, the manufacturing sector has avoided E&O coverage because it was able to rely on general liability coverage with a product-liability component. However, tighter language in liability policies and a trend toward blending products and services may cause manufacturers to consider E&O coverage. Also, larger claims that allege negligence may drive greater interest.