Also known as an errors and omissions (E&O) policy, this policy provides insurance against third-party legal liability arising out of errors and omissions or negligence while rendering a service. The most commonly covered professionals include engineers, architects, chartered accountants, lawyers, interior decorators and management consultants. A must have policy and a legal requirement in many regulated industries.
Professional Indemnity/ Errors and Omissions Insurance cover provides protection for the company and its subsidiaries for claims brought in respect of negligent acts, errors or omissions in the performance of professional services.
The policy is meant to pay for defence expenses and damages and includes amounts that the insured is legally required to pay because of judgments, arbitration awards or the like rendered against the insured, or for settlements negotiated in accordance with the coverage afforded by the policy.
Most Services Oriented companies can take a professional indemnity policy, including:
- Information Technology Companies
- Call Centres / Business Process Outsourcing Companies
- Financial Institutions
- Media Companies
- Law Firms
- Other Professionals
Of course, errors are not restricted to humans alone. Machines can falter as well. Since modern businesses are highly dependant on machines, it is advisable to have an information and network technology E&O cover for your business.