Errors and omissions (E&O) insurance in Georgia
Georgia law doesn't require most businesses to carry E&O insurance, but you might still need it to sign a contract or get licensed in your field. It provides crucial protection against lawsuits related to your work performance.
What is covered by errors and omissions insurance in Georgia?
Errors and omissions insurance helps pay for legal costs when your business is sued for professional negligence. That includes a wide range of claims, such as:
- Mistakes and oversights
- Breach of duty
- Late or incomplete work
- Misrepresentation
- Undelivered services
- Budget overruns
If a client files a lawsuit related to the quality of your work, errors & omissions insurance will cover attorney's fees, court costs, settlements, and judgments.
Depending on your profession, you might see this policy called E&O insurance, professional liability insurance, or malpractice insurance. Though the name varies, these policies all provide similar protection.
Though it's not mandated by law in Georgia, many professionals and small businesses still need to carry E&O insurance.
Who should purchase errors and omissions insurance in Georgia?
Businesses that provide professional services or advice should have E&O insurance, as their work could directly impact their clients' finances. Basically, if a mistake could cause your client to lose money, then you should invest in this coverage.
Errors and omissions insurance can also pay for frivolous lawsuits. For instance, an unhappy client could sue your business in an attempt to recover their losses, even if it wasn't your fault. These kinds of lawsuits can still end up costing a significant amount in legal defense costs.
Other circumstances outside of your control could lead to a lawsuit, such as losing a key member of your staff right before an important deadline. For these reasons and more, a wide range of professionals depend on E&O insurance for financial protection.
Here are the top industries that depend on this policy, along with some situations where they might need it:
Tech companies
Sole proprietors, startups, and corporations in the tech industry rely on E&O insurance to protect against lawsuits from dissatisfied clients.
Tech professionals often buy this coverage together with cyber insurance in a package called technology errors and omissions insurance, or tech E&O. This bundle helps pay for lawsuits related to data breaches and cyberattacks.
- A software developer delivers a custom application with a configuration flaw that exposes customer data, triggering a client lawsuit.
- A web hosting company mismanages a server migration, resulting in a client’s website being inaccessible during a major sales event.
- A computer repair business misses a repair deadline, preventing a client from meeting contractual obligations with their own customers.
Professional services
Businesses that provide professional services carry E&O insurance to cover financial losses in case a client isn't satisfied with their work.
- A marketing consultant launches a campaign with incorrect pricing details, causing a client to lose sales and demand compensation.
- A security services company fails to follow agreed-upon patrol procedures, allowing damage to occur on a client’s site.
- A wedding coordinator double-books a key vendor, forcing the client to find a last-minute replacement at a higher cost.
Construction contractors
When a construction company makes a mistake, the results can be devastating. That's why E&O insurance is common in the construction industry. Here, you're more likely to see it called professional liability coverage.
- A flooring contractor uses the wrong materials for a commercial space, forcing the business to close temporarily for repairs.
- A HVAC contractor designs a system that doesn’t meet local code requirements, resulting in failed inspections and expensive rework.
- A remodeling contractor underestimates the project timeline, causing delays that disrupt a client’s planned move-in date.
Is E&O insurance required by law in Georgia?
While not mandated by law in Georgia for all businesses, many professionals and small businesses still need to carry E&O insurance to sign contracts or to work in other states. Here are the fields that most often need this coverage—and examples of when they might need it.
Doctors and nurses
State laws sometimes require physicians, especially those with admitting privileges, to carry medical malpractice insurance. In Georgia, acupuncturists are legally required to have this coverage.
Healthcare professionals often need this coverage in order to work at hospitals and other healthcare facilities, and to participate in health networks.
- An acupuncturist inserts needles improperly or fails to follow sterilization protocols, to a patient, causing an infection or nerve injury that requires additional medical treatment.
- A caregiver misses an appointment and their client is alone when they suffer a medical crisis.
- An occupational therapist develops an inappropriate treatment plan that aggravates a patient’s existing injury.
Agents and brokers
Insurance and real estate professionals rely on errors and omissions insurance, partly because their work can have a big impact on their clients' finances. States also sometimes mandate coverage, though it's not required in Georgia.
- A real estate agent fails to disclose zoning restrictions, and the buyer later learns the property can’t be used for its intended purpose.
- A claims adjuster is sued for denying a valid claim because they accidentally looked at a neighboring property instead of the policyholder's home.
- A leasing agent provides incorrect lease terms, causing a tenant to incur unexpected costs after signing the agreement.
Attorneys
In Georgia, lawyers aren't required to carry malpractice insurance, however, attorneys must inform their clients if they don't have coverage.
Malpractice insurance is a crucial part of working for a law firm and proving that your business is reliable.
- A law firm provides incorrect legal advice during contract negotiations, resulting in unexpected financial penalties for the client.
- A paralegal files documents under the wrong case number, delaying proceedings and harming the client’s position.
- A legal secretary sends confidential information to the wrong party, creating legal exposure for the firm.
Top professions that need E&O insurance
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How much is E&O insurance in Georgia?
Errors and omissions insurance costs an average of $67 per month for small businesses in Georgia.
Factors that affect the cost of E&O insurance during underwriting include:
- Type of business
- Your location, such as Atlanta or Savannah
- Business operations and revenue
- Your policy limits and deductible
- Number of employees
- Claims history
Hear from customers like you who purchased E&O coverage.
How does errors and omissions insurance work in Georgia?
If you're sued in Georgia over a mistake in your professional work, errors and omissions insurance will pay for your legal defense costs. It's an affordable policy for many small businesses, especially those with low risks.
Keep in mind that E&O insurance is a claims-made policy, so it works differently from occurrence-based policies like general liability insurance. With E&O insurance, you must keep your policy active in order to file a claim. That's true even for incidents that happened while you had coverage, which is why you should think twice before you cancel your policy.
An errors and omissions insurance policy covers both legitimate and frivolous lawsuits. A legal battle can be expensive, between your attorney's hourly rate, administrative costs, and the resulting settlement or judgment. E&O insurance will cover all of these expenses, up to the limits on your policy.
When choosing your coverage limits, consider how much a lawsuit could set your business back financially. The deductible should be an amount you can easily afford, as you'll need to pay it before you can collect on a claim.
Are there any exclusions in errors and omissions insurance?
As with other policies, E&O coverage comes with exclusions that depend on your insurance company and the details of your policy. In general, E&O policies won't cover the following:
- Discrimination and abuse
- Criminal acts
- Lawsuits filed by your business
For instance, this policy won't help with legal fees if you decide to sue a client over a contract dispute or other issue. It'll only cover legal defense costs in the event of a lawsuit against your business.
Intentional harm, violations of laws and regulations, and services provided by subsidiaries or organizations not listed on your policy would also not be covered. Discrimination and abuse are typically covered by another policy called employment practices liability insurance (EPLI).
Does general liability insurance include E&O coverage?
A general liability insurance policy does not typically include errors and omissions coverage, though it's possible to buy these coverages together in some industries.
These two policies protect against different kinds of risks, which is why small business owners often carry both types of insurance coverage.
- General liability insurance covers accidents that harm someone outside your business, such as a customer who slips in your office and suffers a concussion, or an incident where an employee drops and breaks a client's laptop. It also covers advertising injuries, such as copyright infringement, libel, and slander.
- Errors and omissions insurance pays for legal costs when your business is accused of a negligent act that harmed a client financially. In the case of medical malpractice insurance, this can extend to bodily injuries as well, as physical health is part of a healthcare provider's professional responsibilities.
General liability claims can happen at any business, especially those that are open to the public. E&O insurance is more specific to businesses that offer professional services or advice, especially in areas where a mistake could cause a client to lose money.
Read more about errors and omissions insurance vs. general liability insurance.
General liability insurance
Business owner’s policy (BOP)
Workers' compensation insurance
Cyber liability insurance
Commercial auto insurance
Both professional liability insurance and errors and omissions (E&O) insurance offer financial protection from client lawsuits over unsatisfactory work. They’re essentially the same types of coverage for mistakes in professional services.
How to get E&O insurance for Georgia businesses
TechInsurance is a trusted insurance expert for small businesses, with extensive knowledge of the IT sector. We help business owners find quotes from top-rated providers, buy policies, and manage their coverage options online.
Fill out TechInsurance's easy online application to compare free quotes for errors and omissions insurance and other policies from the leading carriers in the nation. Our insurance agents are available to help answer any questions you may have.
Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.
