What is E&O insurance? Confusing terms unwrapped

Mistakes happen, even to the most careful employees. That’s where Errors & Omissions (E&O) coverage comes in. This liability coverage not only protects against mistakes made by a business, but also mistakes made by employees.

E&O provides protection in situations where the policyholder makes a mistake (an error or omission) that leads to a financial loss for their client, so the policyholder needs to pay the resulting damages (or potential lawsuit). The loss could be due to professional services or inaccurate advice.

For example, consider a carpet installer. If the contractor picked up the wrong carpet from the dealer and installed it in a customer’s home, the installer would need to remove the carpet, replace it, and cover the costs to fix the mistake.

Who needs it? 
E&O liability coverage is beneficial for:
  • Heating and air conditioning contractors 
  • Electricians 
  • Plumbers 
  • Carpet installers 
  • Masons 
  • Concrete contractors 
  • Tile, stone, and marble installers 
  • Communication equipment installers 
  • Independent agents 
  • Financial advisors 
  • And so many more 
Not all insurance companies provide E&O coverage for all types of business. Learn more and talk to your independent agent to decide whether your business needs E&O coverage. If you already have E&O protection, review your policy annually to make sure you maintain adequate limits.