Professional Liability Insurance

Protect your business reputation and financial health with a professional liability insurance policy from Stay Kalm Insurance.

Professional liability insurance, which is also called errors and omissions insurance (E&O), protects your business if you are sued for negligence while performing your services.

Virtually all professionals and business owners face risks in delivering professional services. Professional liability insurance policies help pay for the defense of your business when you’re sued and when other types of policies, such as commercial general liability insurance, don’t come into play and only cover non-professional liability issues.

Examples of Professional Liability (E&O) Insurance Coverage

The reason your business may need a professional liability policy is that certain products and professional services may result in legal claims without causing a type of harm covered by another type of policy.

Some examples of errors & omissions insurance coverage include:

Software Failure

If a software program fails and causes financial damages to its user, the company that created the software might be liable for those damages in a lawsuit. However, the type of damages brought in the lawsuit might not be covered by the company’s other insurance policies. E&O insurance ensures that a business enjoys full protection against all potential lawsuits.

Custom Products

A company that creates a product that fails but doesn’t harm anyone may cause the product’s creator to be vulnerable to a lawsuit. If no one using the product was physically harmed and the only failure was with the actual product, E&O insurance would be the only insurance coverage that would cover that liability.

Errors & omissions insurance offers coverage for an incredibly diverse number of industries. For example, a disagreement about the square footage on a property for sale could lead to a lawsuit if the buyer found that the advertised square footage was dramatically different than what he or she was led to believe during the purchase of the property.

Another problem could occur during the delivery of services at a hair salon where a hair treatment solution harmed a client’s scalp or caused his or her hair to fall out. The resulting lawsuit would be covered by an errors & omissions policy.

When a product fails in the health care industry or within the medical profession, errors & ommissions insurance is called malpractice insurance.

Who Needs Professional Liability Insurance?

Professional liability insurance is often used by a variety of agents, brokers and consultants. Those professionals may include notaries public, insurance agents and real estate brokers. These insurance policies are common for individuals, as well as companies.

Some E&O policies are even designed for specific industries and types of professionals. Service providers like home inspectors, landscape architects, attorneys and quality control specialists benefit from professional liability insurance. Other professionals include website developers, third-party business administrators and engineers.