Errors and Omissions insurance covers losses that are due to errors or omissions of professionals who are held to a higher standard of care due to their type of practice, education or other association. Doctors, architects, dentists, software manufacturers, technology consultants, business consultants, engineers, advertising agencies, and realtors are all examples of operations that may be subject to professional or errors and omissions lawsuits. These types of claims are generally excluded from the General Liability Insurance so a separate coverage is needed to respond to these claim issues.
Even if you manufacture, assemble or install to customer specifications; provide design work; select raw materials; provide service to others for a fee; subcontract work; or print material for clients, you could have a significant Errors & Omissions exposure.
Just as you purchase insurance for your other risks, E&O exposure is real and needs to be considered. As opposed to some types of claims, E&O losses are not frequent, but usually are very costly, with losses ranging from tens of thousands to millions of dollars. In addition, if you are named in a suit, you must defend the claims. If you are uninsured, that legal defense will need to be paid by you.