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What Isn't Covered by E&O Insurance?

Like any insurance policy, Errors & Omissions Insurance can't protect your business against everything. While specific exclusions vary from carrier to carrier and policy to policy, the following are events that are commonly excluded from E and O protection.

  • Malicious, dishonest, criminal, or illegal acts, including intentional violation of any law, regulation, statute, or ordinance.
  • Services you might provide under the name of any other business, charity, or organization that is not named in the policy.
  • Liability for damages against or on behalf of any other insured party named on the policy (i.e., if your partner sues you or your company, your policy won't cover you).
  • Copyright, patent, or trademark infringement.
  • Bodily harm to any person, including sickness or death (though this may be covered by your General Liability Insurance).
  • Damaged property or loss of use resulting from such damage.
  • Libel or slander.
  • Illegal discrimination.
  • Violation of any securities act.
  • Pollution.
  • Humiliation, imprisonment, wrongful entry, eviction, invasion of privacy, or malicious prosecution.
  • Insolvency.
  • Extraordinary liability assumed under contract (unless the liability would have existed even in the absence of the contract).
  • Failure to secure, provide, advise, or maintain financing or other monies (unless you have a financial services / investment advisor policy).

Keep in mind that, depending on your needs, you may be able to add coverage for some of these incidents to your E & O policy. The best way to ensure that your policy offers coverage for the risks you face is to talk with an insurance agent familiar with the needs of small IT businesses.

Next: What Does Errors & Omissions Insurance Cost?

70% of businesses raise prices or cut hiring when sued