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E&O Insurance 101

E&O Insurance 101

E&O Insurance 101

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Professional liability insurance aka E&O insurance is a type of liability coverage designed to protect all sorts of professionals including accountants, lawyers, mortgage brokers, human resource consultants, management consultants, architects, engineers etc. against liability incurred as a result of errors and/or omissions in performing their professional services for a fee. Errors and omissions insurance policies will cover professionals from allegations of negligence resulting from the professional services provided and will cover defence costs and settlements or judgments against an organization.

Does Our Company Need E&O Insurance Coverage?

If your company provides services to a third party for a fee that could result in some form of financial loss by your customer or client than E&O insurance coverage should be considered.  ALIGNED Insurance Brokers in Toronto, Waterloo, Calgary and Vancouver would be happy to discuss the potential fit and possible need for errors & omissions insurance coverage for your organization and expertly trained to identify such exposures.

How Do I Know How Much Errors and Omissions Insurance To Buy?

E&O insurance policies can be purchased at various limit levels and often how much is purchased is determined by the amount of limit a client requires the organization to carry.  However, this common methodology to determine how much E&O insurance coverage is enough isn’t always correlated to the underlying risk and developing a worst case loss scenario with the support of a Canadian insurance broker who specializes in E&O insurance policies like ALIGNED Insurance brokers is recommended.

What Does An E&O Insurance Policy Cover & Exclude

The most common exclusions in errors and omissions policies are for bodily injury (BI), property damage (PD), and intentional/dishonest acts. Although there are a few exceptions (e.g., physicians, project managers, architects, and engineers etc), E&O insurance policies for most professionals only cover economic or financial losses suffered by third parties, as opposed to bodily injury (BI) and property damage (PD) claims. This is because the latter two types of loss are typically covered under commercial general liability (CGL) policies.

What Else Should You Know About Errors & Omissions Insurance?

The vast majority of E&O insurance policies are written with claims-made coverage triggers. In addition, they often contain what are known as “shrinking limits,” meaning that unlike CGL policies (where defense costs are typically paid in addition to policy limits), the insurer’s payment of defense costs reduces available policy limits and aggregate.

Call 1-866-287-0448 To Speak To An ALIGNED Insurance Broker About A E&O Insurance Policy Today Or Connect With Us At www.alignedinsuranceinc.com To Learn more About E&O Insurance Coverage For Your Organization.

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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