Errors & Omissions Insurance

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E&O Insurance for Businesses

An Errors & Omissions Liability policy, also known as Professional Liability Insurance or E&O insurance, protects an individual or a corporation from allegations of financial loss due to negligent professional services rendered for a fee. Virtually all business transactions have an element of professional services but the most obvious professional liability exposures exist in the following professions:

  • Medical Professionals
  • Legal Professionals
  • Architects and Engineers
  • Insurance Brokers
  • Accountants or Auditors
  • Real Estate Agents or Brokers

These professionals are typically guided by a Standard of Care doctrine. However, there are many other professions such as business consultants who should also carry this insurance. The easiest guideline to consider is whether you are providing professional services. If so, you or your company may be at risk. If you are unsure if you or your company requires this coverage, connect with an FCA advisor today for a conversation.

Key Considerations When Choosing a Professional Liability Policy

 

  • Per Claim & Aggregate Limits

    Errors & Omissions Liability policies will have both a per claim and an aggregate limit. Common limits are $1M, $2M and $5M but higher limits can be purchased. The size of the limit required is dependent on the type and scope of your professional operations.

  • Defence Coverages

    Some policies will include defense costs under the limits of the policy while other more robust policies will cover defense costs in addition to the policy limits, leaving the full policy limits available for claims settlements.

  • Deductible

    Deductibles typically start at $1000 and can increase from there. Depending on the nature of the professional services and size of firm the deductible will be part of the insurance negotiations.

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How much does E&O Insurance cost?

Insurance premiums for professional firms can start as low as $2,000 per year and can scale up according to the firm’s details based on the following:

  • Type of professional services offered
  • Annual gross fees billed
  • Percentage of work contracted to sub-consultants
  • Insurance claims history
  • Professional designations held by employees of the firm.

Can coverage be obtained for specific projects?

Yes. Generally speaking a project specific professional liability policy provides coverage to the entire project beginning at the design phase to 24 months past the completion date. This unique coverage will act much the same as policies described above but coverage is only applied to a specific project. This type of policy is usually obtained for complex projects where the value is $10 million or more.

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FCA is Canada’s Insurance Expert Since 1919

FCA has been providing Canadian companies with insurance since 1919. We have set the industry standard for turnaround time for both new and existing clients. We pride ourselves in ensuring our clients are receiving the best suite of coverages at a fair price.

FAQ

To get started with obtaining Professional Liability insurance, your FCA broker will require a thorough understanding of your firm’s operations, services and completion of relevant applications. From here your broker will work to provide competitive quotes from the market and help you develop a robust risk management process in the effort to avoid future claim activity.

The majority of E&O policies in today’s market are Claims Made policies. These means that claims must be reported during the policy term and when the insured becomes aware of the claim. A failure to report a claim, or even a potential claim, during this time will likely lead to an unfunded liability exposure.

A Claims Made Errors & Omissions Liability policy will also have such conditions as a retro-active date. A retro-active date is the effective the date that the policy is officially placed for the first time, essentially when the coverage for professional services commence. If, however, you or your firm has offered professional services prior to this first effective date of professional services then the Claims Made policy will not afford coverage.

This is an area that the specialist at FCA Insurance Brokers can provide appropriate advice and direction to avoid any unfunded liabilities. Once a retro-active date has been established then this date should always be noted on the declaration of the policy documents. In some cases, the insurer may offer an open retro-active date.

Professional firms should generally purchase a Commercial General Liability Insurance (CGL) policy to complement the professional liability policy. The CGL covers the cost of property damage or bodily injury caused to your client or third parties on your premises. Many professional firms also require property, equipment, cyber and auto insurance as well. Your FCA advisor will complete a thorough review of your professional firm and will recommend a full suite of customized coverages tailored to your specific needs.

A self-insured retention, is a form of deductible, is an amount that an insured retains and covers before insurance coverage begins to apply. This allows the insurer to not defend a claim unless the insured intends to call upon the policy.

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Testimonials

Carol

Laura does the work to get us the best prices with the best coverage.  She also keeps us abreast of the new types of insurance that a business such as ours might need.  Her yearly renewal visit is comprehensive to say the least, but when she leaves, we all understand the exact nature of each and every policy our business has.

Lisa

FCA covers us for all our business requirements, from equipment to liability, property, builds and everything in-between. Errol Williams is so patient and helpful; I am always confident that we are getting the best possible coverage at a competitive rate. Always the best service!

Cam

Jamie and his team have been great to deal with, providing transparent advice and excellent service!

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