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Errors and Omissions Liability Insurance / EPLI

Lawsuits Can Happen to Even the Best Professionals

Individuals who perform a professional service for others can be held legally accountable for their actions. A lawsuit can be brought against  any professional for alleged or actual mistakes. Even if no error occurred, simply defending these suits can be costly. Errors and Omissions Insurance protects against the financial impact of such lawsuits.

What is Errors & Omissions Liability Coverage? 

Errors and Omissions Liability coverage (also known as E&O insurance or Professional Liability Insurance) protects your company from claims if your client holds you responsible for errors, or the failure of your work to perform as promised in your contract.  

Coverage includes legal defense costs - no matter how baseless the allegations. Errors and Omissions Insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy. Errors & Omissions Insurance coverage extends to both W2 employees and 1099 subcontractors, and can be worldwide in scope.

The specialized coverage provided by Errors & Omissions Liability Insurance may be offered as an optional additional coverage at an additional premium on Commercial Package Policy (CPP). It can also be included in a customized commercial insurance plan.

Shopping for E&O Liability Insurance?

Brunswick Companies' team of commercial insurance specialists provides the expertise to help you identify your exposures and simplify your insurance purchase, providing the information you need to make an informed decision. We will work with you one-on-one to identify the errors and omissions liability coverage plan that suits your specific needs. 

We are here to assist you in evaluating your exposures and the level of protection required to meet your goals. We can evaluate, negotiate and enforce your E&O policy, directors and officers liability,  fiduciary liability, employment practices liability and other management liability insurance policies. Our clients range from Fortune 500 companies to smaller corporations, as well as boards of directors seeking independent assistance with their own policies.

Why Do I Need E&O Coverage in Addition to General Liability Insurance? 

Professionals can be sued for a host of alleged or actual mistakes. Here are two examples:

Negligent Consulting Advice 

A management consultant  was hired by the president of a distributor to help the organization with budgets, staffing, and executive decision making. The contract was worth $200,000. The consultant implemented a reorganization strategy and spending controls, as well as a new staffing model to address the organization's needs. However, 2 years after the reorganization, the client alleged that the spending control solution and staffing model had a negative impact on its bottom line when the expense of hiring and training new employees was taken into consideration. The client sued the management consultant for negligence in rendering a flawed solution, seeking $200,000 (the cost of the contract) as well as lost profits. The cost to defend the case will exceed $75,000. An adverse outcome at trial could add more than $200,000 to the bill.

Mailing Error

A direct marketing agency was hired by a bank to send preapproved credit card applications to two groups. One group had an excellent credit history and was to be offered low-interest, high-limit credit. The other group had a poor credit history and was to be offered high-interest, low-limit credit. The direct marketer sent the "excellent credit" applications to the group with a poor credit history and the response to the mailing was immense. The bank sued the direct marketer for negligence over the mailing error. The direct marketer paid over $1 million to settle the case. 

Comparing Errors and Omissions Liability Plans

Brunswick Companies offers errors and omissions liability policies from wide range of top ranked insurers. All of the insurers we represent have received ratings of A- (excellent) or better from A.M. Best Company. With over 35 years of commercial insurance experience, we have the know-how and industry contacts to match your needs with the plan that best suits your risk management and financial goals.

Who Should Consider Purchasing Errors & Omissions Insurance? 

• Adjusters
• Advertising agencies
• Auctioneers
• Business brokers
• Business managers
• Consultants
• Court reporters
• Credit bureaus
• Escrow agents
• Executive coaches
• Financial planners
• Forensic investigations
• Franchisors
• Human resource consultants
• Interperters and translators
• Insurance agents and brokers
• Landscape architects
• Management consultants
• Marketing consultants
• Notaries
• Polygraph operators
• Process servers
• Property managers
• Public relations firms
• Real estate agents
• Stockbrokers
• Surveyors
• Tax preparers
• Training consultants
• Trustees
• Web page designer
• Title abstractors
• Travel agencies (Insurance for travel agencies indemnifies the insured for breach of duty claims arising out of any negligent act, error or omission in the advising or arranging of transportation, hotel or motel accommodations or special tours for clients.)

Errors and omissions insurance must be considered for numerous service type businesses emerging in a service-oriented economy. Notable examples are:

• Computer software developers
• Contest managers
• Electronic data processing companies
• Employment and temporary help agencies
• Freight forwarders
• Hearing aid service offices
• Marketing and direct mail companies
• Medical billers
• Printers
• Telephone secretarial services

The concern is the potential for economic loss incurred by a client as a result of dependence on service performed by the insured.

There are also E&O plans for certain types of service businesses, not identified as office occupancies, which are vulnerable to third-party claims alleging injury, physical or financial, arising from careless performance of services, including:

• Barber and beauty shops
• Reducing salons and health clubs
• Testing laboratories

Errors and Omissions Policies Protect Your Personal Assets 

It is critical that you protect yourself and your family from the financial consequences of such exposures. It is not sufficient to ask if your company has E&O insurance. A consultation with an insurance risk management specialist can help you obtain a more thorough understanding of your exposure to risk and the levels of protection provided by any company-provided plan, allowing you to make an informed decision as to whether securing additional protection is warranted.

For additional information, see our  new Handbook, Errors & Omissions Insurance: A Beginner's Primer.