If you are a business owner and want to protect your company from possible legal action, you know you have to back the business with the right insurance policy. But what type of policy? Professional liability or errors and omissions insurance? Which is better? And are they the same? For an insurance company, professional liability and E&O insurance questions are easy to answer.
What are the differences? There aren’t many, but they do exist, and they can be significant. Here are a few ways the two products are different.
Differences and Similarities
Today, professional liability and E&O insurance are nearly synonymous, but that was not always the case. Years ago, professionals, like lawyers and doctors, would purchase professional liability insurance, which would protect them from malpractice. A similar product was available to smaller businesses, sometimes called semi-professional occupations, termed errors and omissions insurance.
There are technical differences between the two. Professional liability insurance provides a larger umbrella of protection than an errors and omission policy, which is intended to be slightly more specific in nature. You will discover various insurance products under that professional liability umbrella. E&O insurance is more focused on protecting professionals from what they did and didn’t do.
Ask your insurance company the right questions. Professional liability or errors and omissions insurance? They will help determine which is right for you.