Errors and Omissions Insurance (E&O Insurance) protects professionals & their businesses financially if they get sued because of negligence, errors, mistakes, and other reasons. This insurance is also called professional liability insurance & professional indemnity insurance in Ontario, Canada.
Why is having Errors & Omissions Insurance protection beneficial for my Business?
E&O insurance protect your business in a variety of instances. Being adequately insured should be a top priority in your company’s risk management strategies. In the event that you or one of your employees is legally liable for negligence or misinformed information, to name a few exposures, this insurance policy can protect you financially. It may pay for the financial damages of the customer along with any potential lawsuits settlements and legal fees. This all depends on your policy terms and coverages.
In Ontario, the typical error, omission, or negligence lawsuit can cost a business almost as much as $100,000. The most staggering part is that this number doesn’t even include what you will pay for the defense and court costs. Just imagine what you would pay for an average lawyer and you can easily see just how expensive one of these cases could get. And, this is not to even mention all the time that you will spend in the whole ordeal.
Rates for an E&O policy start as low as $30/month for the basic $1 Million coverage for IT professionals, Bookkeepers, Paralegals, & other professionals.
This type of insurance is extremely common in fields or industries where professional services are provided. This could include anything from engineering to accounting. If someone is paying you for advice or to perform a service, you can rest assured that you are at risk of being sued for error or oversight. The most common claims with these types of cases are:
- Professional mistakes
- Failure to deliver on what was agreed upon
- Professional negligence
Whatever the situation is, the most important thing to remember is that it is the client that initiates the lawsuit in the first place. If the client thinks you haven’t performed your duties to the best of your abilities or made an oversight, they can initiate one of these cases. The worst part is that you don’t even have to be truly at fault. Just your defense alone will cost you an arm and a leg.
You can continue reading by learning about the basics of E&O (Professional Liability Insurance coverage) and how it will protect your businesses by clicking here.
Frequently asked questions before buying an E&O Policy
- What will my E&O policy cover?
- Does my business require this coverage?
- What does errors and omissions insurance cost?
- How can I lower my insurance cost?
- How does E & O insurance for independent contractors I work with work?
- What does this policy not cover?
- Why do some of my clients require that I have an errors & omissions coverage in place prior to working with me?
- What is a certificate of E&O liability insurance?
- What if I want to cancel my E&O coverage?
What Businesses Need E&O Insurance?
If you are in a profession that provides services or advice to the public you absolutely need errors and omissions from a licensed insurance broker or agent in Canada.
Here at ProfessionalsCoverage, we offer this policy to consultants, real estate agents, insurance agents, financial advisors, lawyers, accountants, engineers, architects, and a variety of other businesses. In some situations, it might even be necessary for business partners and licensing boards to acquire this type of policy. In fact, it might be required by contract.
At the end of the day, any business is at risk of a lawsuit if they cause customers to experience a financial loss. For instance, as a lawyer you are often times required to give your clients advice. If you tell your client to plead guilty in order to avoid jail time, but he or she ends up getting jail time anyway, they could sue you for misinforming them. This is why it is always imperative to make sure that your business is protected in the event that you are faced with one of these situations.
Does your business require E&O insurance coverage? Click here to learn more.
Please find the list of professions we commonly insure below:
What Does E&O Insurance Cover?
Here at ProfessionalsCoverage, we offer a variety of unique E&O policies that can protect your company in certain situations. When it comes to professional or E&O liability insurance coverage, there are a few ways that this insurance can protect you.
Your policy can protect you or your employees from any professional mistakes that are made on the job. This could include anything from miscalculations to bad recommendations, misdiagnoses, or even more. This type of policy can also protect you if you are unable to deliver on promised services. For instance, if a contract is drawn up and the customer feels that you didn’t fulfill it they can bring charges against you.
Not only this, but a client can simply claim that your work didn’t meet the professional standards that they expected. They can also bring law suits in this case and this is exactly where errors & omissions will offer the reprieve that you need.
Summary of coverages provided provided:
- Actual or Alleged Negligence – Whether you give misinformation or provide a service that results in a financial loss to your customer, our negligence protection can cover you. Whether you are actually at fault our not, this coverage will protect you.
- Defence Costs – Even if you aren’t at fault, you are going to be dragged into court, which will result in hefty lawyer and court costs. Your E&O business insurance policy can cover these costs, regardless of the situation.
- Staff or contractors you hire temporarily
- Claims from the past (Retroactive Coverage) – Your policy can provide coverage for claims that arise out of your past provided there is a retroactive coverage clause on the policy. This clause extends the policy coverage to a certain date in the past. The purpose of this is to provide protection for claims that arise from your past work.
- Claim Settlements – In the event your liable to pay an amount of money legally, the policy will cover the claim settlements up to the policy limit and provided that the cause of loss was insured under the policy.
- Libel & Slander – In the event you or your employees cause damages by wrongfully attacking a persons character, this coverage can extend coverage for the damage causes. Imagine you or your employees unknowingly spread false facts about a competitor’s operation which resulted in their reputation being hurt leading to them losing business.
- Copyright Infringement – There might even be situations when some customers, clients, or business competitors claim that you stole their ideals or business models. E&O can protect you from these types of claims.
- And other exposures – You must speak to an E&O broker about your business’ exposures to determine what risks will be covered and which will be not.
Our E&O policies even offer the protection that you need for previous jobs and advice, regardless of where in the world the job was performed or where the advice was given. Not every businesses qualifies for this coverage. For reference, you want to ask your broker or agent about retroactive coverage if you are interested in this type of protection.
What an E&O Insurance policy will not cover
- Any fraudulent actives conducted by the business.
- Any fines that the professional is obligated to pay.
- Making false claims to induce clients & customers to choose working with your business.
- If the government or authorities are involved with the insured because of a criminal act.
- If the risk is already covered under another insurance policy.
- If you conduct improper employment practices which result in a claim, this policy will offer no coverage.
- No coverage is offered in the event employees get injured while working as this exposure is covered under a worker’s compensation insurance policy.
- No coverage is offered for claims that arise out an exposure that is covered under a commercial general liability insurance.
Go to this page to keep reading about what coverages and conditions are limited and excluded under standard E&O policy terms.
What Policies should I have in addition to E&O coverage?
While E&O Liability Insurance protects the professional from negligence and similar exposures, it does not offer protection for damages, losses, and injuries that occur as a result of the client physically suffering.
CGL Insurance
To be fully protected, every Ontario business owner should explore Commercial General Liability Insurance which is also known as CGL insurance & Business Insurance (Business liability insurance).
CGL can provide protection for exposures such as bodily injury, property damage, and personal injury. It is always best to speak to a broker before purchasing coverage. The broker gets paid to help you by the insurance company. Use their services to the whenever you have a question or doubt!
Workers Compensation Insurance
You as a business owner must ensure that employees are covered under a workers compensation insurance plan. This would ensure that you are not liable if he employee gets hurt or is unable to work as a result of performing work related tasks.
Cyber Insurance
With increased number of cyber attacks being a reality this year, every business should have some form of protection that covers them for liability or losses that can occur as a result of the internet.
Cyber insurance can be added on to a policy for a cheap premium annually.
Other coverages
You may operate in an industry that requires very specific coverages in place. Speak to a broker and let the professional craft the policy your business needs.
Cost For Errors And Omissions Insurance
It is true that there are some businesses in the Ontario area that are more in need of omissions insurance than others. Sure, this might increase the cost of their coverage policies, but it really means that these at-risk businesses really depend on this policy for certain protection.
Rates for E&O start as low as $30/month for the basic $1 Million coverage. Prices change depending on the insurer and their risk exposures.
With that being said, there truly are a variety of factors that can determine your business’s overall cost for E&O Liability Insurance coverage:
- Business Type – The type of business that you are in can make a major difference in the price of your policy.
- Location – If you are located in a bad area or a high-risk area, there is a good chance that you might have to pay more for E&O coverage as well.
- Selected Coverage Limits – A company that needs a $2,000,000 claim is going to have to pay more than a company that needs a $1,000,000 policy.
- Employees – The number of employees that you have can also make a difference in the overall cost of your policy. Companies with more employees will be expected to pay more, because they are at a higher risk.
To view a full list of factors that determine the cost of your E&O policy, go to this page.
As mentioned above, each company is going to need a certain amount of coverage and different business insurance policies that include Ontario E&O Insurance coverage. This is why it is best to let one of our expertly trained professionals customize your policy for you.
Our agents can help you decide on the amounts and types of coverage that you need to ensure that you, your business, and your employees are protected at all times. You can get free quotes from our website or you can get the toll-free number and speak with one of our agents. We are standing by 24/7 to assist Ontario businesses, small and large.
Get a Quote
Getting a quote is simple process. It starts with speaking to a broker who understands your business and it’s exposures.
Following that, either of 2 things occur:
- The broker does an application over the phone and provide you a quote right away.
- The broker sends you an application to complete which he or she sends to insurance companies for consideration.
One the E & O liability insurance broker receives coverage terms and quotes from the insurance company, he or she presents it to you. A good broker should walk you through what you are buying and explain each coverage along with how it applies to your business. This way you know your dime is being spent on what is needed and not just a big package that is broad.
If you agree to the terms and the quote, you instruct the broker to secure (bind) the coverage. From that point on, the broker sends you payment instructions.
Brokers offer this service for free. It should never cost you anything to get quotes. Insurance brokers make money from the commission they earn on securing your account. So… request a quote today!
Other useful information
- What is Professional Liability
- General Liability vs Professional Liability Insurance
- Professional Liability Insurance Cost
- Difference between a claims-made and occurrence form coverage
Professional Disability Insurance
You biggest asset in life is your earning ability. If you are unable to work, you will need to rely on either your savings or borrow money to sustain your lifestyle. When these unfortunate circumstances occur, dependents and spouses are also impacted financially and emotionally.
Disability insurance coverage will provide you a monthly income benefit, usually totaling 70% to 80% of your income, when you are unable to work for a period of time due to injury or illness.
Types of Disability Insurance we offer
- Long-Term Disability Insurance (LTD)
- Short-Term Disability Insurance
- Key Person Disability Insurance
- Self Employed Disability Insurance
- Mortgage Disability Insurance
- Temporary Disability Insurance
- Supplemental Disability Insurance
Other types of insurance we provide:
To learn more about the types of insurance we offer, you can click here.