Coverage · FORM EO
When your advice becomes the liability.
Professional liability — also called Errors & Omissions — covers claims that your professional services, advice, or deliverables caused a client financial harm. General liability won't respond to these claims. This policy will.
What's Covered
What this policy responds to
- ✓Claims of negligence in the performance of professional services
- ✓Errors and omissions in advice, reports, plans, or designs you deliver
- ✓Missed deadlines or failure to deliver contracted services
- ✓Breach of duty claims from clients who relied on your professional judgment
- ✓Legal defence costs — which can be significant even in groundless claims
- ✓Settlements and awards up to policy limits
Exclusions
What it typically doesn't cover
- ✗Bodily injury or property damage (covered under General Liability)
- ✗Intentional fraud or criminal acts
- ✗Claims arising from services not described in the policy schedule
- ✗Prior known circumstances not disclosed at inception
- ✗Disputes over fees or billing rather than professional performance
Exclusions vary by carrier and can sometimes be addressed with endorsements. Ask your advisor.
Who Needs This
Businesses that typically carry professional liability
Consultants, engineers, architects, and designers
Accountants, bookkeepers, and financial advisors
IT firms, software developers, and technology service providers
Real estate agents, mortgage brokers, and property managers
Common Questions
What clients ask before they bind
Do I need this if I already have general liability?
Yes. General liability specifically excludes claims arising from your professional services. E&O is a separate policy that covers exactly what GL doesn't — the work product and advice you deliver.
What if the claim is completely frivolous?
Frivolous or not, you still need to mount a defence. Legal fees for even a baseless claim can reach six figures. E&O covers defence costs from dollar one, regardless of merit.
How is the policy limit structured?
Most E&O policies have a per-claim limit and an annual aggregate. Higher-risk professions (engineers, architects) typically carry $2M or more per claim. Your advisor will benchmark limits against your contract values and exposure.
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