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Professional Liability/E & O

In today's world, suing for professional damages is not only fashionable but has almost reached the level of an art form. Any individual who renders advisory or professional services runs the risk of being sued by clients. The same applies to a business entity that provides a professional service or manufactures a product or products for sale. Two insurance policies, Professional Liability Insurance or E&OE insurance are designed specifically for such professionals and commercial enterprises who are at sustained risk of civil litigation from clients. The results of such litigation could often end in devastating financial loss that could cripple the accused. In such a hostile environment a professional practitioner or entity is often defenseless. It is then vitally essential that such persons or institutions be covered by professional liability insurance.

Many professional practitioners protect themselves with general liability insurance which they believe offers adequate protection. A general liability insurance policy covers a policy holder against personal injury, bodily injury or property damage that the policyholder may be responsible for. But professional practitioners and commercial institutions could attract claims for damages which are physically intangible and where no physical injury is involved. Typical examples of such claims are violation of good faith and fair dealing, misrepresentation, negligence and incorrect advice. In the case of a manufacturing enterprise the action could rise because of financial losses a buyer sustains due to failure of a product to meet its committed claims.

General liability insurance protects a professional or entity from claims brought by third party. It offers limited liability with coverage not as encompassing as specific malpractice policies. For this specific reason, professional liability insurance is so designed to protect professionals or experts in a particular field who, because of their professional expertise, may not be protected by general liability. A professional is deemed to be of a higher standard of expertise in a particular field and is hence assumed to hold greater responsibility and liability towards clients. By extension, a professional practitioner must have greater coverage than is offered by general liability insurance.

Errors and Omissions (E&OE) policies are intended to cover two basic risks: (1) financial loss of a client arising from failure of the policyholder's product to perform as expected or intended, and (2) financial loss of a client arising from an error, act, or omission committed in during the policyholders performance of services for another.

E&OE policies covers such professional practitioners as real estate brokers, appraisers, website developers, lawyers and accountants, to name but a few. Specific E&O policies are designed for professional practitioners and for technology companies, typically such as consultants and website developers where deficiency in services results in financial losses that could justifiably be attributed to deficiency in a product or professional capability.

To practice certain professions, it is mandatory to be covered under an E&OE policy. For example, a medical practitioner would be covered under malpractice insurance which is mandatory almost all over the world. Under such a policy a health care protector is provided with legal assistance and claim coverage, and a patient is assured of financial compensation if injured through medical negligence or mistakes.

If you are a professional practitioner or commercial entity which needs protection by Professional Liability or E&OE insurance and would like to know more on this subject, or any other form of personal, home, auto, business of life insurance, please visit Insurance by Allied Brokers website at If you would like to contact us we are available on phone (650) 328-1000, fax (650) 324-1142 or on email at You can also contact us using our Online Contact Form.

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