Errors and Omissions cover (or E&O as it is also known) is an extension commonly added to a Public and Products Liability policy.
Before going into what E&O is, it is important to firstly understand the fundamental cover provided by “Public and Products Liability” Insurance.
A Public and Products Liability policy is triggered by either Personal Injury or Property Damage to a third party as a result of your business operations. Where a claimable incident has occurred, a Public and Products Liability policy will defend your interests against that liability and, if legally held liable for the injury or damage provide you with indemnity for the third party’s loss.
An example of a Public Liability claim could be where an Earthmoving business accidentally damages underground cabling belong to a third party whilst working on site. In this case, and assuming their Liability policy has been well-arranged, they would rely on the Public Liability section of their program to defend their position in the matter and indemnify them should they be held legally responsible for the damage.
There are many situations that can arise where a business can cause pure financial loss to a third party through an error or omission. Without the trigger of injury or damage, their Public and Products Liability policy will not respond. In these situations, an Errors and Omissions extension may help.
The types of Errors and Omissions extensions available vary in price and scope of cover depending on the insurer and there are distinct differences between Errors and Omissions and a full Professional Indemnity policy. If you think you may have an E&O exposure or would like to discuss this in further detail, please contact us at McLardy McShane South East and we would be happy to elaborate.