What does Errors & Omissions Insurance Cover?

by kapil Mehta # Guest Blogger

When running a business, you need many kinds of insurance. One of the most important ones is errors and omissions insurance. However, many businesses do not have this coverage, or do not realize they do when it comes time to take advantage of it. To properly protect your business, errors and omissions coverage is an absolute must. 

What is Errors and Omissions Coverage?

If you are providing a professional service for your clients of any kind, then errors and omissions will protect you if you are sued because you are unable to provide that service. It may be that someone on your team made an error, you missed a deadline, or your advice did not work out how you intended. You could end up being financially crippled by defense costs and the potential award if a judgement goes against you. Here are some examples of what e&o insurance covers. 

Negligence Accusations

If you have not completely satisfied a client, and they feel that you have been negligent in providing their service, then they may bring legal action against you. They could claim that you did not meet certain industry standards, or even that you have done something malicious. For example, you provide cloud-based CCTV services, but a client is not able to access a video from a certain time or day. There may have been an unforeseen issue on your end that you could not control, but the client may think otherwise. 


You never want a simple human error to cause serious damage to your business. Unfortunately, when it comes to us humans, we make mistakes all the time. If someone on your team makes an error, such as entering in data incorrectly, that causes damages to a client, then you may be sued. There are any number of errors that a company could make, such as being a supplier that ships out too little of a product, and the re-seller is not able to meet an important deadline for a client. 

Services Not Rendered

A client may feel that you are not providing a service for which they have paid. This can happen if they misunderstand what they are getting when they become a client, or someone on your team misrepresents it. This can happen a lot when it comes to insurance, and clients don’t realize that they are not covered for something under their policy until it’s too late. 

What Compensation Can Be Provided?

Your errors and omissions coverage will protect you against various costs associated with legal actions taken against you for the above reasons. They will compensate you for costs related to investigating the claim, damages, and legal representation. Always contact your insurance company as soon as possible to make sure you are covered. E&O insurance will not cover fraud, injury, property damage, or if you go over an agreed upon quote for services. 

There are many ways that your business might be vulnerable. Make sure that you are always protected with the right insurance, including errors and omissions insurance. 

Author Name: Mia Tyler

Bio: Mia Tyler grew up in Phoenix, AZ but attended very small private schools. Growing in small communities, she developed a yearning to surround herself with diversity and culture. She matured into a creative and versatile freelance artist, who's not afraid to take on any task. She is a writer, graphic designer, entrepreneur, and craft enthusiast. She is a curious and worldly young professional who loves to share her interests with others. Mia now lives in New York with her adopted pup Lily and soaks up all the culture and knowledge she can.

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About kapil Mehta Senior   # Guest Blogger

205 connections, 0 recommendations, 518 honor points.
Joined APSense since, July 25th, 2016, From Ambala cantt, India.

Created on Oct 28th 2021 06:52. Viewed 155 times.


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