What does E&O not cover?

Understanding What Errors and Omissions (E&O) Insurance Does Not Cover

Errors and Omissions (E&O) insurance, also known as professional liability insurance, provides coverage for professionals against claims of negligence, errors, or omissions in the performance of their professional services. While E&O insurance offers valuable protection, it’s essential to understand its limitations and what it does not cover. In this article, we’ll explore the aspects that E&O insurance typically excludes from coverage to help professionals make informed decisions about their insurance needs.

What Does E&O Insurance Cover?

Before delving into what E&O insurance does not cover, let’s briefly review what it typically includes:

1. Negligence Claims: E&O insurance protects professionals from claims alleging negligence or failure to perform professional duties with the expected standard of care.

2. Errors and Omissions: Coverage extends to errors, mistakes, or oversights made by professionals in the course of providing their professional services.

3. Legal Defense Costs: E&O insurance covers the costs of defending against claims, including attorney fees, court costs, and settlements or judgments, up to the policy limits.

4. Damages: If the insured is found liable for professional errors or omissions, E&O insurance provides coverage for damages awarded to the claimant, including compensatory damages and sometimes punitive damages.
   
   

What Does E&O Insurance Not Cover?

Despite its comprehensive coverage, E&O insurance typically excludes certain types of claims and scenarios, including:

1. Intentional Misconduct: E&O insurance does not cover claims arising from intentional or criminal acts committed by the insured. It only applies to unintentional errors, mistakes, or negligence.

2. Fraudulent Activities: Claims related to fraudulent activities, dishonesty, or illegal conduct are generally excluded from E&O coverage. Professionals engaged in fraudulent behavior are not protected by their E&O insurance policies.

3. Property Damage and Bodily Injury: E&O insurance is designed to cover financial losses resulting from professional errors or omissions. It does not provide coverage for physical damage to property or bodily injury caused by the insured’s actions.

4. Breach of Contract: While E&O insurance may cover claims of professional negligence, it typically does not extend to breach of contract claims. Professionals may need separate contractual liability coverage to address breach of contract risks.

5. Employment Practices Liability: Claims related to employment practices, such as wrongful termination, discrimination, or harassment, are excluded from E&O insurance. Businesses may need separate Employment Practices Liability Insurance (EPLI) for such risks.

6. Cyber Liability: E&O insurance generally does not cover losses arising from data breaches, cyberattacks, or other cyber-related incidents. Professionals may need specialized Cyber Liability Insurance to protect against these risks.
   
   

Errors and Omissions (E&O) insurance provides essential protection for professionals against claims of negligence, errors, or omissions in the performance of their professional services. However, it’s important to recognize that E&O insurance has limitations and does not cover certain types of claims, including intentional misconduct, fraudulent activities, property damage, and bodily injury. Professionals should carefully review their insurance policies and consider additional coverage options to address specific risks not covered by E&O insurance.