Errors and omissions (E&O) insurance in Maryland

Sole proprietors, independent contractors, 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.

Examples of situations where technology professionals would benefit from E&O coverage include:

• An IT consultant recommends insecure software that leads to a data breach on a client's system.
• A cloud computing provider suffers an unexpected outage that suspends a client's ability to do business.
• A computer repair business fails to fix a client's computer in time for an important project.

Businesses that provide professional services carry E&O insurance to cover financial losses in case a client isn't satisfied with their work.

Examples of situations where professional services providers would benefit from E&O coverage include:

• An event planner fails to book a venue they'd guaranteed for a client's wedding.
• A security guard overlooks a threat and someone vandalizes their client's property.
• A recruiter makes a typo in a job listing and candidates expect a higher salary and different benefits.

When a construction company makes a mistake, the results can be devastating. That's why E&O insurance is common in construction. Here, you'll more often see it called professional liability coverage.

Examples of situations where construction professionals would benefit from E&O coverage include:

• An electrician installs faulty wiring, which causes a fire that damages a client's home.
• A painter fails to complete a project on time and a store is forced to delay its grand opening.
• A general contractor doesn't comply with building codes, forcing the homeowner to complete a costly renovation on an outbuilding.

State laws sometimes require physicians, especially those with admitting privileges, to carry medical malpractice insurance.

In Maryland, doctors and healthcare providers are not required by state law to carry coverage. However, insurers often mandate policy minimums for healthcare providers if they elect to get coverage.

Healthcare professionals regularly need this coverage to work at hospitals and other healthcare facilities, and to participate in health networks.

Examples of situations where healthcare professionals would benefit from malpractice coverage include:

• A registered nurse accidentally gives the wrong dose of medication to a patient, who suffers an adverse reaction.
• A home health aide misses an appointment and their client is alone when they suffer a medical crisis.
• A chiropractor makes an improper adjustment that worsens a client's back pain.

Agents and brokers in both the insurance and real estate industries rely on errors and omissions insurance, partly because their work can significantly affect clients' finances.

States also sometimes mandate coverage, though Maryland doesn't require it. Brokerages often have E&O policies and require coverage, even if the state does not.

Examples of situations where agents and brokers would benefit from E&O coverage include:

• A real estate agent makes a mistake in an MLS listing, and the buyer discovers the property was smaller than advertised after they've finalized the purchase.
• An insurance agent fails to protect a client against risks they thought they were covered for, but they didn't find out until a flood swamped their property.
• A claims adjuster is sued for denying a valid claim because they accidentally looked at a neighboring property instead of the policyholder's home.

In Maryland, lawyers are not required to carry malpractice coverage. However, attorneys must inform their clients if they don't have malpractice insurance.

Malpractice insurance is crucial for working at a law firm and proving your business is reliable.

Examples of situations where legal professionals would benefit from E&O coverage include:

• A law firm misses a deadline for submitting paperwork to the court on behalf of their client.
• An attorney fails to get consent from a client before making an important decision for them.
• A legal assistant misplaces a key document that was needed for a client's case.

General liability insurance typically doesn't include errors and omissions coverage, though some businesses can buy both coverages together.

These two policies protect against different risks, so small business owners often carry both.

• 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 if your business is accused of a negligent act that harmed a client financially. In medical malpractice insurance, this can extend to bodily injuries as well, since 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.