Professional liability and errors and omissions insurance both protect businesses from expensive lawsuits caused by unsatisfactory work. The language used may differ by industry.
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Professional liability vs. E&O vs. malpractice insurance
Many industries use the terms “E&O insurance” and “professional liability insurance” interchangeably. You may also hear these policies called “malpractice insurance.”
Common industry names for this policy include:
- Professional liability insurance for architects, accountants, and consultants
- E&O insurance in the real estate and IT sectors
- Malpractice insurance in the medical and legal professions
No matter the name, this coverage protects you from lawsuits if you make a work mistake, fail to complete a project, miss a deadline, or are accused of professional negligence.
How professional liability insurance protects your business
Businesses that provide professional services typically need professional liability / E&O coverage because those services come with risks. A client could hold your business liable for:
- breach of contract
- work oversights or errors
- providing substandard or incomplete work
- missed deadlines
If these professional mistakes result in financial losses for a client, they could sue to recoup expenses. Professional liability / E&O insurance helps cover:
- attorney fees
- court costs
- settlements or judgments
Even if there was nothing wrong with the quality of your work, a difficult or dissatisfied client could sue your business over a perceived problem. In that case, you might win the lawsuit but still have to pay attorney fees and court costs out of pocket. Without professional liability / E&O insurance, a lawsuit could present a major financial difficulty for your business.
Learn more at Jones Family Insurance – Serving Punta Gorda and Fort Myers
