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⊸ Business Insurance⊸ Errors And Omissions Insurance

Find the best errors and omissions insurance

Errors and omissions insurance is needed because no one is perfect. Errors, omissions, and mistakes happen. It’s part of doing business. Errors can happen when you offer products or services, consult, or give advice. You need errors and omissions insurance to protect your business when they do.

At ThinkInsure, we can help you find the proper errors and omissions policy. We’ll compare quotes from the top insurers in Canada to find the best rates and coverage. Speak with an advisor today and make sure you are protected.

Key takeaways about errors and omissions insurance

  • Errors and omissions is a type of liability insurance coverage for businesses offering professional services.
  • With E&O coverage, you’ll receive financial protection in case of an alleged error, mistake or negligence.
  • This insurance helps cover the costs of lawyer fees, damages, and settlements.

What is errors and omissions insurance?

a couple having a business meeting

Errors and omissions insurance is a type of liability coverage that provides financial protection when claims and lawsuits are made against you for negligence (mistakes, errors, oversights, bad advice). It protects your business when it is sued because of errors made by you, your company, or your employees.

It protects businesses from liability exposure. The type of liability exposure depends on your profession and the work you do. Errors and omissions insurance has many other names, including :

An E&O policy outlines the type of liabilities you have protection against, your limits and how much protection you have if you cause damage or face a lawsuit. Your policy details are commonly specific to your industry and the products and services you offer. This type of coverage is advisable for any company offering professional services to the public (B2C) or other organizations (B2B).

Types of errors and omissions

Errors and omissions can happen in many different ways. They include:

  • Advice that caused a financial loss
  • Alleged or actual negligence
  • Claims from services provided
  • Damages caused by bad advice or poor services rendered
  • Personal injury such as slander or libel
  • Marketing and advertising mistakes
  • Copyright infringement
  • Failure to complete work
  • Missing deadlines
  • Failure to fulfill contractual obligations

For example, a client follows your advice to change business operations practices. They implement your ideas, and productivity and sales take a significant dip. They do not get the desired results and suffer a financial loss. They may sue you to recover lost revenue.

Do I need errors and omissions insurance?

Errors and omissions coverage is a requirement for many professions. You may need this insurance to meet licencing requirements or enter client contracts.

Even if it's not required, all professionals are exposed to a certain level of risk. You give advice and enter agreements and are expected to meet certain expectations. Mistakes happen. Sometimes, these mistakes can cause financial loss or damage to your commerce partners and customers - meaning the potential for lawsuits against you.

E&O insurance protects you when you or your employees make mistakes. It also offers financial protection when false or disputed allegations are made against you. Without this, you would be financially liable in a lawsuit.

Professions requiring E&O insurance

A long list of professionals either require or benefit from E & O coverage. Here’s a list of the most common professions:

  • Architect
  • Lawyers and paralegals
  • Insurance agents
  • Mortgage brokers
  • Accountants and bookkeepers
  • Consultants
  • Dental and medical care
  • Media
  • Financial advisors
  • IT and technology providers
  • Real estate agents
  • Travel agents
  • Home inspectors

See our 5 star insurance reviews

ThinkInsure Google 5 star reviews

Rated 4.7 out of 5 stars in 1411 Google reviews

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The Jordan Family

2024-06-20

Star Rating Review2

Solely was an absolute pleasure to work with. He was very knowledgeable and quick to respond. He had my new policy up and ready in the course of an afternoon, not to mention the best rates out all brokers I came across. I highly recommend this man and his customer service. 5 star service indeed!

Jade W

2024-06-17

Star Rating Review2

Bailey went above and beyond. Was insanely patient with my scatter brain and a million questions. He explained everything to a point of actually understanding vs "that other" company that made me feel like a child for not understanding their legal ramblings. I appreciate you!!!!

Erfan Javid

2024-06-14

Star Rating Review2

I worked with Sohel, and he put in an incredible effort for me! Sohel is an amazing insurance broker who was very helpful and honest. Communicating with him by phone and email was effortless, and he completed all my insurance paperwork without any hassle. I had insurance sorted out with just one phone call and one email thread.

How to get an errors and omissions insurance

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How does errors and omissions coverage work?

Here’s a quick overview of how E&O policies work:

  • You can add errors and omissions to your existing business insurance policy
  • Errors and omissions coverage kicks in when a third party takes legal action against you alleging negligence, errors, or mistakes
  • The amount of coverage you require depends on your profession and the services offered
  • You can increase your policy limits at an additional cost
  • Policy limits apply to the policy term, not individual claims
  • You must pay the policy deductible. This varies by insurer
  • You will not be covered if you knowingly deceive or are dishonest with clients

What does errors and omissions insurance cover?

You receive protection against various liabilities that could severely impact your operations. It allows you to work without fearing a lawsuit or financial damages due to a mistake.

While the type and scope of coverage can vary, here is what E & O insurance protects against:

  • Poor advice: Offering wrong, misleading, or incorrect advice.
  • Negligence: Making an error while providing a service.
  • Libel and slander: Negatively impacting a client’s reputation.
  • Loss of documentation/materials: Losing a client’s documents, products, and raw materials.
  • Misrepresentation: Unknowingly providing data or information that is incorrect or misleading.
  • Delays: Failure to provide timely services and meet obligations because of a third party.
  • Breach of confidentiality: Information leaks.

What is not covered by E&O insurance?

Certain actions are omitted from E&O policies, including:

How much does errors and omissions insurance cost?

businesspeople working together in boardroom

The average cost for errors and omissions insurance ranges. It can start as low as $500 annually and up. Expect to pay anywhere from $50 to hundreds per month. It is primarily based on your business type and how much risk you are willing to take on. Some enterprises have greater risk exposure than others, requiring higher E & O limits, which increases costs.

Here are the top factors affecting your premiums:

  • Company size
  • Industry
  • Location
  • Legal standing
  • History of lawsuits matter
  • How your people are trained
  • Professional certifications
  • Annual revenue
  • Your legal documentation
  • Coverage limits
  • Risk mitigation strategies

These can all affect costs. Review your options to determine the amount of insurance you need for your specific situation.

See our 5 star insurance reviews

ThinkInsure Google 5 star reviews

Rated 4.7 out of 5 stars in 1411 Google reviews

We help customers save more on insurance every day!

See all reviews

The Jordan Family

2024-06-20

Star Rating Review2

Solely was an absolute pleasure to work with. He was very knowledgeable and quick to respond. He had my new policy up and ready in the course of an afternoon, not to mention the best rates out all brokers I came across. I highly recommend this man and his customer service. 5 star service indeed!

Jade W

2024-06-17

Star Rating Review2

Bailey went above and beyond. Was insanely patient with my scatter brain and a million questions. He explained everything to a point of actually understanding vs "that other" company that made me feel like a child for not understanding their legal ramblings. I appreciate you!!!!

Erfan Javid

2024-06-14

Star Rating Review2

I worked with Sohel, and he put in an incredible effort for me! Sohel is an amazing insurance broker who was very helpful and honest. Communicating with him by phone and email was effortless, and he completed all my insurance paperwork without any hassle. I had insurance sorted out with just one phone call and one email thread.

Errors & omissions insurance FAQs

Errors and omissions is an optional type of business coverage. However, it is required in most professions that offer services to the public or other businesses. Even if it is not required for your business, it is highly recommended that you protect yourself if you or an employee make a mistake or oversight that causes a financial loss for your customers.

This insurance is for any business offering advice or services. Whether you are a home-based business, SMB, freelancer, or large enterprise, E&O can help.

People make mistakes, and this coverage will protect you if your advice causes damage to clients or customers.

No. In most cases, you will require one or the other. Professional liability insurance and E&O insurance offer similar types of coverage. The term insurer’s use for this type of coverage can vary. Speak with your insurance expert to ensure you are getting what you need.

Errors and omissions insurance and professional indemnity (PI) insurance are interchangeable terms. They are essentially the same. They protect you from lawsuit costs when a customer believes you have acted in error. Or they believe you made a mistake when providing advice.

While both offer liability protection, directors and officers insurance is specifically for CEOs, leadership, directors, and officers who make decisions for your organization. E & O covers claims made against your company for the professional services you offer.

While these coverages may seem similar, there is a key difference between a surety bond and E & O. Surety bonds protect companies when they fail to perform to a certain standard as promised. E & O coverage protects when your services harm a third party.

It depends on your business structure and many other factors. Most policies start with $1 million in coverage and go up from there. Speak with your insurer about your needs to determine plan limits.

It depends on the parameters of your policy. You may or may not have protection. Check with your insurer before you choose an E&O policy.

Yes, this coverage protects you if you or an employee are negligent in providing services to a customer or client.

Like other business insurance products, you will have an errors and omissions coverage deductible. This amount can range from $2,000 to more, depending on your company size, coverage limits, and other factors. Speak with our team about your deductible options.

How do I prevent E&O insurance claims?

You can limit your mistakes by having good commerce practices. Every step to mitigate risk and eliminate mistakes can reduce the chances of a lawsuit. Use these tips to prevent E & O claims:

  • Communicate regularly: Stay in regular contact with your clients. Make sure you set clear guidelines and expectations, so everyone is on the same page.
  • Have a detailed review process: Set aside time to review all work and documentation before sending it to your clients.
  • Use realistic timelines: Do not promise timelines you cannot stick to. Build in some buffer time to ensure you are on time.
  • Have a system: Have an organized plan for how you work with clients, store documents, and manage projects.

Errors and omissions claims examples

There are countless examples of mistakes professionals make during the course of doing business. Here are a few examples:

  • An accountant provided incorrect tax advice to a business, which the CRA then audited and fined.
  • An electrician incorrectly installed new wiring in an office building, sparking a small fire that forced the office to close for a week.
  • A financial planner advised clients to invest in a stock, which then plummeted, and they lost a large portion of their investment.
  • A graphic design firm creates a new logo for a startup. Months later, your company was sued for copyright infringement because the logo was too similar to that of another business. You then get sued for the mistake.
business people meeting at conference table

Get a quote for errors and omissions insurance today

We all make mistakes. Add more protection for your organization. Get an errors and omissions insurance quote today. Our insurance experts will help you find the right solution at the best rates.

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