Professional Liability/Errors and Omissions (E&O) coverage protects against claims alleging financial damages that arise from the delivery of professional services to clients.
The term “Professional Liability” is typically used to refer to coverage provided to lawyers, architects, engineers, accountants and medical professionals who must adhere to strict codes of conduct regulating their professions.
“Miscellaneous Professional Liability” is typically used to refer to coverage provided to other types of professionals such as contractors, property managers, bankers, mortgage brokers, consultants, franchisors and many others. The term “Errors & Omissions” coverage is often used interchangeably with the terms “Professional Liability” and/or “Miscellaneous Professional Liability.”
Scenarios where professional liability coverage can offer protection:
- A property owner alleges that a Property Manager’s inadequate bookkeeping lead to a shortfall in collected rents and substantial economic loss to the property owner
- A claim is brought against a Third Party Administrator providing various administrative services for employee benefit plans alleging that the TPA failed to make required tax payments and failed to properly invest accumulated deposits.
- A Management Consultant assists a client with the selection of a software solution vendor to replace the client’s outdated IT systems. The systems failed to work properly and the client alleges that the consultant was negligent and breached a duty of care in the discharge of professional services by improperly selecting the vendor.
- A Design/Build Contractor is sued by its client because poor project management, and design flaws escalated the project costs.