Is there a difference between professional liability and errors and omissions insurance?
As a business owner, you know how important it is to secure the right commercial insurance in Los Angeles
. As you discuss your coverage needs with your insurance agent, they may bring up professional liability and/or E&O insurance (errors and omissions insurance). But what are these coverages, and why do they seem to be discussed interchangeably? Here's what business owners need to know about professional liability and E&O insurance.
First, it's important to understand that professional liability and E&O insurance are the same types of coverage. This coverage can also be referred to as malpractice insurance. The names can be used interchangeably depending on the industry that your business works in. For instance, architects, accountants, and consultants usually use the term professional liability insurance. Real estate and IT professionals tend to call it E&O insurance. Those in the medical and legal sectors refer to the coverage as malpractice insurance.
Regardless of what your industry call is, professional liability insurance offers coverage for businesses who are accused of making costly mistakes by their clients. For instance, a business would access their professional liability insurance if a client holds it liable for breach of contract, work oversight or mistakes, providing substandard or incomplete work, missed deadlines, and so on. Even if there is nothing wrong with the quality of your work, a dissatisfied client could still sue your business for a perceived issue. Fortunately, your professional insurance would handle the costs of the claim, including legal fees, court costs, and settlement expenses.
- Why This Coverage Matters
The obvious benefit of professional liability insurance is that it helps you cover the cost of expensive claims. However, having this type of insurance can also help you be more competitive. Because many clients require companies to carry this coverage before hiring them, already having professional liability protection will increase the chances of earning their business.
This is what you need to know about professional liability and E&O insurance. Do you have additional questions about your commercial insurance in Los Angeles
? If so, then contact the experts at Fuller Insurance Agency in Southern California. We are ready to get you the coverage that you need today.