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Professional Liability, E & O, D & O – E.I.E.I.O.

Insurance policy So what is this type of coverage and what do these initials mean?

Essentially, they are all forms of professional liability insurance tailored for a particular industry.

  • Professional liability insurance in the medical field is also known as medical malpractice - with coverage designed for your medical doctors, dentists, chiropractors, practitioners, nurses,  et cetera.
  • Errors and Omissions (E & O) coverage is geared toward your insurance agents, notary public, real estate agents, appraisers and technology fields.

  • Directors and Officers (D & O) coverage is for the directors and officers of a business. It provides the company with protection for any wrongful acts that one of its corporate directors may be responsible for while performing their corporate duties. These acts are not limited to misstatements, neglect or errors and omissions.

The key to remember is that a standard general liability policy or business owners policy provides coverage for bodily injury, property damage, personal injury or advertising injury claims. You will typically find that these policies contain an exclusion related to any claims resulting out of advice given. Therefore, if you want protection against this type of exposure, you will need to purchase a separate policy.

Professional liability coverage can essentially provide protection for that coverage gap and protect you from claims of negligence, misrepresentation and inaccurate advice.

The economy is changing with business executives being laid off. We are seeing these individuals starting up their own businesses, many of which are management and consulting firms.

A simple question that you can ask yourself to determine if this coverage is needed for your business is “are you giving advice, or making suggestions for an individual or business?”

If you answered “yes," then talk with your agent regarding your business exposures to ensure you have the right coverage for your business needs.

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