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What Is Errors and Omissions?
Errors and omissions coverage helps protect your business from financial loss if you make a mistake in your professional services, or fail to provide a service. This business insurance coverage is also known as professional liability insurance or E&O coverage.
Professional liability insurance can help protect your business if your:
- Law firm’s bookkeeper makes a mistake that costs your client thousands of dollars.
- Client sues you after your real estate agents forget to provide housing updates agreed upon in the contract.
- Programmer exposes your client’s computer to a virus and they lose months of important files.
Without liability protection in situations like these, you’d have to pay out of pocket for your legal fees and defense costs.
To learn more about this coverage, visit our errors and omissions insurance page.
What Is General Liability Coverage?
General liability coverage helps protect your business from covered claims that you caused bodily injury or property damage. It also protects you from claims of advertising injury.
In many cases, this coverage is also known as commercial liability or business liability coverage. Let’s take a closer look at what it covers:
Bodily injury caused by your business. For instance, if your customer trips over a box in your store and gets hurt, general liability can help pay their medical costs. However, for an employee’s work-related personal injury, you need workers’ comp coverage.
Property damage your business causes to someone else’s property, for example:
- Your employee damages a client’s computer during a business meeting.
- A waiter at your restaurant spills a drink and ruins a customer’s phone.
- One of your landscapers kicks up a rock with their lawnmower and breaks a customer’s window.
It’s important to know that for damage to your own property, you need commercial property insurance.
Advertising injury, like copyright infringement in your business’ advertisements or reputational harm. For example, if one of your employees says something negative about your competition in an interview, it can be considered reputational harm.
To learn more about this coverage, visit our general liability insurance page.
Product Liability Insurance vs General Liability
Although product liability insurance and general liability sound similar, there are important differences between them. General liability helps cover damage caused by your business, not by the products you sell. Product liability coverage protects you if the products you sell cause damage.
Find out how general liability and errors and omissions insurance compare to other policies.
Learn more about what liability insurance covers by getting a business insurance quote.
How Are General Liability and Errors and Omissions Insurance Similar?
General liability and errors and omissions insurance both protect your business from liabilities. They’re also both a type of business insurance.
How Are General Liability and Errors and Omissions Insurance Different?
Although similar, general liability and errors and omissions have key differences. General liability helps cover your:
- Business property
- Equipment
- Operations
Errors and omissions insurance helps cover risks that have to do with the professional services you provide.
Unlike general liability, insurance companies write errors and omissions policies on a “claims made” basis with a retroactive time period. This means that claims made against your business before the retroactive time frame aren’t usually covered. When choosing a professional liability policy, it’s best to choose a retroactive date that goes as far back as possible.
Who Needs General Liability Insurance?
The more your business works with customers and clients, the more likely it is that you’ll face a lawsuit. This means you’re more likely to need general liability insurance.
Who Needs Errors and Omissions Insurance?
Your business likely needs errors and omissions coverage if you offer professional services. This is especially true for:
Who Needs General Liability and Errors & Omissions Insurance?
In most cases, you’ll want general liability and errors and omissions coverage. Having both broadens your protection if someone sues you. To learn more about errors and omissions insurance costs, you can speak with an insurance agent or get a small business insurance quote from an insurance company like The Hartford.
Last Updated: July 12, 2022