Errors and Omissions Business Insurance
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Errors and Omissions Business Insurance

E&O insurance is a necessity for businesses dealing with the public sectors and specific industry services. Third parties doing business may also be subjected to a lawsuit simply because they may have been involved in one stage of the transaction but not the actual cause of the error or omissions.

Business transactions are the life lines for most business; they can also present problems, which is why having the proper business insurance is critical not matter what size of business of service is being provided.  Errors and omissions (E & O) insurance is typically a separate insurance policy for most businesses.

As a business liability coverage insurance policy it's used to defend professionals for transactional mistakes that may cause harm to another professional or business. Normally, the error occurs in a business process and in most cases the error is unintentional.  Those transactional errors may have been caused by employees and in today's technology world a computer may be responsible for failing to complete a transaction properly resulting in negative consequences for the customer.

The E & O insurance prevents the professional, individual or company from carrying the entire financial burden for recovery costs or lawsuit expenses as a result of the errors and omissions.  E & O insurance policies are available with different levels of coverage amounts, terms and exclusions depending on the size and type of business. Most agent insurance companies offer the ability to add additional levels of coverage increasing the business liability insurance coverage amounts. These levels may vary depending on the type of business service and the level of industry risk potential related to the business. 

When looking for insurance, there are several elements that need to be considered to ensure that you and your company are protected against allegations and potential legal judgments. First find an insurance agent, who is experienced and knowledgeable with your type of business, industry service and customer.


  • Company structures can affect the insurance policy costs, coverage limits and exclusions.
  • Using third parties such as independent contractors, subcontractors, local and remote employees may be included in the coverage.
  • Whether your company is a sole proprietor, Limited Liability or Corporation the clientele may require proof of insurance coverage before agreeing to do business.


  • Insurance companies may ask for company, financial and management information as part of an evaluation assessment.
  • The assessment provides the facts pertaining to the specific business and industry statistics, determining accurate insurance coverage.
  • It’s important to understand, in all circumstances, the insurance policy will not cover poor management decisions or intentional errors.
  • The policy itself should be detailed about what is covered and what is excluded for future planning and business development.


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Comments (2)

good recap

Insurance for every calling