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Professional liability vs. errors and omissions insurance

Errors and omissions insurance covers lawsuits over work mistakes. Depending on the industry, this policy is also called professional liability or malpractice insurance.

What does professional liability insurance cover?

While you'll find different names for errors and omissions insurance (E&O), this policy covers the same type of lawsuits in every industry.

If a customer or client sues your business over a professional mistake or oversight, an errors and omissions policy can provide financial protection. You'll receive the same coverage with professional liability or malpractice insurance – the other names for E&O policies. 

Errors and omissions insurance

Tech professionals, insurance agents, and real estate agents usually use the term errors and omissions insurance. In the tech industry, it covers work mistakes like coding errors and delayed launches due to missed deadlines.

Professional liability insurance

Architects, accountants, consultants, and engineers usually use the term professional liability insurance to refer to this policy. Professional liability insurance coverage protects against work mistakes like ordering the wrong materials or filing taxes incorrectly.

Malpractice insurance

Doctors and lawyers use the term malpractice insurance. In these industries, this policy covers lawsuits over wrongful death, professional negligence, and other work mistakes.

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How to respond when clients use the wrong term

Clients aren’t typically aware that different terms are used for errors and omissions insurance in different industries. They may ask for proof of professional liability or malpractice insurance instead of asking for proof of E&O coverage. Client contracts may also refer to errors and omissions insurance by another name.

While this can be confusing at times, it shouldn’t be an issue legally. You’ll almost always be able to use the terms interchangeably, even in a legal contract.

The more important issue is the amount of coverage the client requires. IT professionals typically purchase errors and omissions coverage with a $1 million aggregate limit. It’s a good bet your clients will require a policy in that range, regardless of what term they use for it.

Professional liability vs. other types of insurance

Professional liability, errors and omissions, and malpractice insurance all provide identical coverage for work mistakes. But their coverage differs drastically from other liability policies such as general liability insurance and employment practices liability insurance.

These liability policies are not different terms for the same type of coverage.

Professional liability vs. general liability insurance

Errors and omissions insurance covers lawsuits from customers, clients, or business partners over work mistakes. To complement E&O, general liability insurance covers lawsuits from people who were injured or had their property damaged at your business location. Both policies are important for tech businesses.

Professional liability vs. cyber liability insurance

Cyber liability insurance covers the cost of recovering after a cyberattack. This includes the cost of any lawsuits over data breaches that affected sensitive customer or client information.

While this policy isn’t the same as errors and omissions insurance, it’s often included in it. This bundle is called technology errors and omissions insurance, or tech E&O.

Professional liability vs. employment practices liability insurance

Employment practices liability insurance covers lawsuits from employees and former employees who claim they faced discrimination, harassment, or wrongful termination at your business. If your tech business has employees, this policy provides key coverage for a different type of liability lawsuit.

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