Errors & Omissions Insurance

Errors And Omissions Insurance Ontario 

Errors and omissions insurance (also known as E&O insurance) is professional liability coverage required by various individuals and companies that provide professional services where mistakes can have significant consequences. This includes industries such as accounting and other financial services, engineers, marketing, consultants, IT services, graphic designers, and many more. Despite the high skill and best intentions of those in these fields, a professional error or omission in the performance of their services could cause financial type losses to their customers. Everyone makes mistakes from time to time, so it is important that the proper protection is in place. When you also realize that such mistakes can cost thousands of dollars in court costs and lawyers, the extra level of protection becomes well worth it.

Liability arising from losses from a professional service is excluded under the standard business insurance commercial general liability policy without errors and omissions insurance coverage added. Ontario business owners should be aware that legal expenses to defend suits of alleged failure to provide adequate professional services can be significant. Legal costs for defending these suits may be covered under an errors and omissions policy.

What Is Errors And Omissions Insurance?

Errors and omissions insurance is a form of professional liability insurance that protects a business and its employees from paying out of pocket for covered expenses and damages related to legal claims made by clients for presumed mistakes and missteps resulting in financial damage. The list of mistakes that may be covered includes accusations of negligence, inaccurate advice, late or undelivered work, errors in services given, and other alleged errors. Ontario policyholders with errors and omissions insurance are protected against financial costs if they need to be defended in court. It doesn't matter if the allegations are groundless because their insurance carrier will provide certain defense. This will give company owners peace of mind, knowing that if confronted with an expensive legal case, their company can continue to run without extreme legal costs.

Who Needs Errors And Omissions Insurance?

There are many professions in Ontario where practitioners are required by law to have professional liability insurance. However, when it comes to errors and omissions insurance, Ontario service providers may need it even if it is not mandatory. If you have an advice or service-providing business in exchange for a fee, or if you develop products, devices or components, you likely need errors and omissions insurance. E&O insurance will protect you against claims from clients of mistakes  they believe you should be legally responsible  loss you caused them from an alleged error. Ontario professionals and business owners can get the right coverage by calling the experienced brokers at Morison Insurance who will address their needs and provide an errors and omissions insurance quote.

What Is Covered By Errors & Omissions Insurance?

The coverage of Errors and omissions may sound vague, but it accurately describes what is covered by errors and omissions insurance. It covers a wide variety of possible claims you may face despite your best intentions. Ontario policyholders with this type of coverage can expect it to cover liability costs related to each of the following, depending on their specific policy:

• Undelivered services
• Professional negligence
• Missed deadlines
• Misrepresentation
• Bad or inaccurate advice
• Acts of misconduct
• Violation of good faith
• Advertising injury
• Slander or libel
• Accusations of the above

Please note that the above is not an exhaustive list, as E&O coverage can provide financial protection against even more. Please note that policies also vary based on the insurance company providing coverage. If you are unsure if a potential scenario is covered by E&O insurance, our insurance experts and brokers at Morison Insurance would be glad to answer any questions you have about errors and omissions insurance.

What Does Errors and Omissions Insurance Not Cover?

Unfortunately, as much breadth as E&O insurance has, it doesn't cover everything. There are a few cases where even E&O coverage will not protect a policyholder. These situations include, but are not limited to, the following:

• When the policyholder commits illegal activities or actions 
• An act of discrimination against a client, potential client or other claim-maker
• Willfully doing an inadequate job or improper work or any other intentionally negligent act.
• Property damage to a client or third party
• Bodily injuries to your clients or anyone else
• Your own employee suffering a work-related injury.
• Actions or cases that began before the policy was put in place.
• Any other incident that is covered by any other form of business or commercial insurance. An example of this would be damage done to your clients by a third-party cybercrime, which would be covered by cyber liability insurance.

In summary, a good guideline would be that E&O coverage does not cover intentional or illegal actions or claims covered by other types of business insurance. To know for sure if Errors and Omissions Insurance covers something, call one of our expert brokers at Morison Insurance, and they would be happy to assist you.

Does Errors and Omissions Insurance Cover Independent Contractors? 

Yes. You do not need to be an incorporated company to be covered by errors and omissions insurance. If you are an independent contractor, ensure that your broker knows and understands how it impacts your sole proprietor business so that they can provide proper coverage to protect you from claims by clients and third parties. It is also worth noting that, as with all policyholders, independent contractors are legally required to do everything within their power to prevent an accident, damage or other harm from occurring to clients or third parties.

Does Errors and Omissions Insurance Cover Me If One Of My Employees Makes A Mistake? 

Usually, mistakes made by your employees are covered while they represent your company. For example, say a financial planner who represents you gives poor advice to a client, and the client decides to sue your company for financial damages. If your company has errors and omissions coverage, your company would be protected by the policy. The actions of your employees while working under the scope of their employment to you for the insured services are covered by the policy. If they make a mistake that is covered by your policy, the cost of claims and third-party damages will be covered by your insurance provider up to the coverage limits and subject to the terms detailed in your policy.

Does Errors And Omissions Insurance Cover Defence Costs? 

Generally, yes, legal defence and court costs are covered by errors and omissions insurance if the legal action results from an insured peril that falls under coverage and policy terms. Ontario residents should note, however, that some E&O insurance policies also include defence expenses within the limit of liability set by the insurance plan. This,, limits the amount of insurance that may actually be available to pay a claim. Some policies also exclude punitive damages. It is essential to ensure that coverage fits your exposure because the wording on each policy can vary. For more information on this coverage, contact our Morison Insurance commercial brokers. We are here to help you navigate these difficult complexities and will do everything we can to offer you the best coverage possible.

What Does "Claims-Made" Mean For Errors & Omissions Insurance? 

Most E&O insurance policies are written on a "claims-made" basis. This means that any claim must be made and/or reported within the policy period in which it was first discovered and made, according to the periods outlined on the specific policy for errors and omissions insurance. Ontario policyholders should be aware that these policies have retroactive dates stated and it could be a date previous from a prior policy. The retroactive date is important as the policy will not cover claims that arise out of an act before this retroactive date.

What's The Difference Between Errors and Omissions Insurance and General Liability Insurance? 

Many people do not realize that there are several types of business liability insurance available and often mix up general liability with errors and omissions liability. As both provide liability coverage for an entity’s business operations, someone may be confused about business liability insurance. These two common forms provide coverage for different resulting third-party ‘damages’.  Commercial General Liability provides coverage due to a third party’s physical property damage or bodily injury, whereas Errors and Omissions provide coverage for claims of non-tangible damages. Both have a provision in their coverage to provide defence. 

It should, however, be noted that E&O coverage generally has strict reporting timeframes. 

If you have any questions about either of these types of coverage, require any clarification, or have any other concerns, your Morison Insurance broker will be happy to address these for you.

How Much Does Errors and Omissions Insurance Cost? 

Since errors and omissions insurance involves many factors, this coverage has no set cost, and the availability and insurance price estimates are difficult to make without a detailed application. Factors that will affect your errors and omissions insurance quote include, but are not limited to, the following:

• The size of your company
• The industry you are in and the type of business that you run
• E&O-related risks faced by you and your business
• Your company's claims history
• Your experience in your field
• The level of protection that you desire in your plan

Our team here at Morison Insurance would happily assist you in applying for a free errors and omissions insurance quote.

What Are Some Ways To Mitigate Loss For Errors & Omissions Insurance?

Are you looking for tips on how to help control your insurance costs by mitigating loss on your errors and omissions insurance? Ontario policyholders can take steps such as:

• Always have a written contract explaining what will be done, what will not be done, and the fees.
• Communicate with your customers throughout the job and manage expectations.
• Have a quality control procedure in place and check the results.

Where Can I Get An Errors And Omissions Insurance Quote?"

Morison Insurance represents several specialized insurance markets for various professional service providers that offer comprehensive coverage for errors and omissions insurance. We have several brokers, each ready, willing and able to assist you with your E&O insurance needs, and work with you to apply  for an errors and omissions insurance quote. Ontario residents interested in more information or want a quote can contact our insurance professionals by phone at 1-800-463-8074 or by starting an online quote. We are here to help.