Professional services: law firms, accountants, realtors, architects and engineers
Financial institutions: advisors, funds, venture capital and private equity firms
Entertainment, media and fine arts organizations
Professional Liability insurance (also known as Errors & Omissions or "E&O") provides protection against the devastating impact of claims and lawsuits arising from the work you do and the professional services you provide. The insurance will pay for defense costs and associated expenses as well as settlements or adverse verdicts at trial. The policy is triggered by the allegation of a "wrongful act", usually defined as an act, error or omission in the performance or failing to perform professional services.
Unlike Comprehensive General Liability, E&O policies do not rely on direct physical damage to trigger the policy – in fact, most E&O policies will deny coverage for claims that arise from an injury or from property damage. Rather, an E&O policy protects your business's balance sheet from being accessed in claims for professional negligence or misconduct, where the harm alleged to have been suffered is purely economic in nature, having no bearing at all on physical harm to person or property. In this regard, a well-crafted E&O policy complements your General Liability insurance by filling a material gap in coverage.
Any business that offers a service to others will benefit from a Professional Liability policy. A short list of examples include:
Many insurers also offer E&O insurance to other service providers on a "Miscellaneous Professional Liability" policy form, where the services to be insured are negotiated and manuscript onto the policy by endorsement. Historically, these forms have covered over 60 different types of professional services are relatively inexpensive and are widely available.