E&O insurance

Why General Liability Insurance Isn’t Enough on its Own

Latest posts by Melissa Selke (see all)

General liability insurance is just that—general. While it provides coverage for a wide variety of potential losses, including claims for bodily injury, personal injury, advertising injury or property damage as a result of your products, premises or operations, if you’re sued for service errors, contract performance disputes or any other professional liability issues, general liability insurance won’t cut it.

Where E&O insurance comes into play

It’s a good news, bad news situation. The bad news: Lawsuits, once a measure of last resort, are now commonplace in settling disputes. The good news? You can protect yourself – and your business and reputation – by investing in professional liability coverage, also known as Errors and Omissions (E&O) insurance.

E&O insurance provides the business owner balance sheet protection by safeguarding against catastrophic loss in the event of a lawsuit due to a negligent act, error or omission by the professional. In addition to claims for errors, omissions or negligence, E&O insurance can also protect against slander, libel and breach of contract.

Who needs E&O insurance?

E&O is appropriate coverage for anyone who:

  • gives advice.
  • makes educated recommendations.
  • designs solutions.
  • represents the needs of others.
  • sells services.

Service professionals such as accountants, lawyers, physicians, technology consultants, software developers, architects, real estate agents, contractors and engineers will all benefit from this coverage.


Errors and Omissions Coverage Is a Must for Technology Businesses

How E&O insurance works

E&O insurance responds when your Commercial General Liability policy does not provide coverage, such as for claims alleging:

  • Negligence
  • Errors in services provided or failure to provide services
  • Omissions
  • Misrepresentation
  • Violation of good faith
  • Inaccurate advice

These policies also cover defense costs, which can be substantial even if liability is not found. Policies typically do not provide coverage for nonfinancial losses or for intentional or dishonest acts.

You need an expert

There are many different forms of professional liability insurance and multiple factors to consider when purchasing E&O insurance coverage for your business. Because there isn’t a standard policy, an experienced broker who understands your company and can design a policy to meet your needs is invaluable.

Email us at [email protected] to learn how E&O insurance fits into your total risk management program.


StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here

Total
3
Shares
Previous Article
referrals

How to Stay Top of Mind and Boost Referrals in Any Business

Next Article
money lessons

Surprising Money Lessons Entrepreneurs Learned the Hard Way

Related Posts
E&O insurance
Read More

Your Technology Company Needs E&O Insurance: Here’s Why

Every business has unique risks that can seriously harm its operations if not properly addressed. As a business utilizing technology to produce and deliver products or services, it’s important to recognize and take precautions against risks that your commercial general liability (CGL) coverage doesn’t include. Technology professional liability coverage, also referred to as tech errors...
cyber insurance
Read More

The Time Is Now to Ensure You Have the Right Cyber Insurance

Jeff Sloan discusses cyber insurance with Michael Spath and Kapnick Vice President Melissa Selke. Here are highlights from that conversation about why your small business needs to make cybersecurity protection a priority. Jeff Sloan, Founder & CEO of StartupNation: Welcome to this edition of Startup Nation. We're focused today on cyberinsurance. We've got Michael Spath,...
cyberattacks
Read More

Why Cyberattacks Are on the Rise and What It Means For You

In a March 21, 2022, statement, President Joe Biden cautioned businesses in the private sector to harden their cyber defenses, reiterating earlier warnings related to potential cyberattacks against U.S. organizations by Russia as retaliation for recent economic sanctions. While there is no evidence of an imminent attack tied to the Russia-Ukraine crisis, Biden’s top cybersecurity...
cyber insurance
Read More

Ransomware Is Biggest Threat to Small Business

Recent high-profile cyberattacks on large companies such as Colonial Pipeline, JBS Meats and Solar Winds have raised awareness of the growing threat of cyber risk, and may indicate to smaller business that they’re safe. After all, what criminal would go after a little guy when there are so much bigger fish to net? Turns out,...