Mistakes happen—even to the most experienced professionals. But when a client believes your error or oversight caused them financial harm, the consequences can be costly. That’s where Errors and Omissions (E&O) insurance comes in.
This essential coverage is designed to protect your business from the financial fallout of lawsuits, legal fees, and settlements tied to professional mistakes. In a state known for its high litigation rates, error and omission insurance in Florida isn’t just smart—it’s necessary.
In this guide, we’ll break down exactly what E&O insurance is, what it covers, who needs it, and how it compares to other types of business insurance. By the end, you’ll understand why this coverage should be a cornerstone of your risk management strategy—and how Darr Schackow Insurance can help you find the right policy to protect your livelihood.
What Is E&O Insurance?
Errors and Omissions (E&O) insurance, also known as professional liability insurance, is designed to protect individuals and businesses that provide professional services. It covers the costs associated with claims of negligence, mistakes, or failure to perform a service as promised—even if those claims are unfounded.
What many business owners don’t realize is that you don’t have to be guilty of doing anything wrong to face a lawsuit. In today’s litigious environment, anyone can sue your business over a perceived mistake or unmet expectation.
And whether the claim is valid or not, you’re still responsible for paying attorney fees, court costs, and other legal expenses to defend yourself.
E&O insurance steps in to cover claims that stem from:
- Misrepresentation or oversight
- Inaccurate advice or documentation
- Missed deadlines or failure to deliver a service
- Clerical errors or omissions
Without this coverage, even a simple misunderstanding could lead to a financial loss that cripples your business.
At its core, E&O insurance helps protect your business reputation, finances, and future—giving you peace of mind that you’re covered if a client says, “You got it wrong.”
What Does E&O Insurance Cover?
Legal Defense Costs: Covers attorney fees, court costs, and related legal expenses—even if the lawsuit is frivolous or unfounded.
Settlements and Judgments: Pays out if your business is found liable for a client’s financial loss due to your professional services.
Alleged Errors or Negligence: Protects against claims stemming from mistakes, bad advice, or poor documentation.
Omissions and Oversights: Helps when you unintentionally leave out crucial information that causes harm to a client.
Professional Misrepresentation: Applies if you or an employee unintentionally miscommunicate or misstate something.
Even if you did nothing wrong, defending your business in court can be incredibly expensive. Errors and omissions coverage helps you cover claims without draining your resources—and gives you peace of mind to focus on your work.
Who Needs E&O Insurance?
Any business or individual that provides professional services or advice can benefit from errors and omissions (E&O) insurance. This type of coverage is especially important in industries where accuracy, communication, and expertise are critical to your client relationships.
Professions that typically need E&O coverage include:
- Real estate agents and brokers
- Insurance agents
- Financial advisors and consultants
- Marketing and IT professionals
- Architects and engineers
- Accountants and bookkeepers
- Lawyers & law firms
- Therapists and licensed counselors
- Small business owners offering professional services
Whether you’re running a solo operation or managing a team, if a client can hold you responsible for a decision, delay, or mistake, E&O insurance protects your business from costly legal fallout.
E&O vs. General Liability Insurance
It’s a common misconception that general liability insurance protects your business from all types of risk. While it’s essential for covering incidents like bodily injury or property damage, it does not cover claims related to professional mistakes, bad advice, or missed deadlines.
General liability insurance is ideal for businesses that interact with the public, such as retail stores, contractors, or event organizers. It helps cover costs if someone is injured on your property or if you damage someone else’s property during your work.
On the other hand, E&O insurance is specifically designed for professionals who offer advice, services, or expertise. If a client claims that your error or oversight caused them a financial loss, E&O covers the legal defense—including attorney fees and court costs—even if the lawsuit has no merit.
For example:
General liability might cover a slip-and-fall accident at your office.
E&O insurance might cover a client lawsuit because a missed deadline caused them to lose a major contract.
If your business relies on accuracy, expertise, or time-sensitive deliverables, you likely need both types of coverage to fully protect your business from physical and financial harm.
How to Choose the Right E&O Policy
Choosing the right errors and omissions insurance (E&O) policy means finding coverage that fits your specific business risks, industry standards, and budget. Not all E&O policies are created equal, so it’s important to understand what to look for.
Here are a few key factors to consider:
Coverage Limits: Make sure the policy limit is high enough to cover the potential financial loss of a major claim, including attorney fees, court costs, and settlements.
Covered Services: Ensure the policy clearly lists the professional services your business provides. If it’s not listed, it may not be covered.
Exclusions: Every policy has limitations. Common exclusions may include intentional misconduct, criminal acts, or certain types of contractual liability.
Retroactive Coverage: Some policies offer coverage for incidents that occurred before the policy’s start date—valuable for professionals who are switching providers or renewing.
Deductible Amounts: A lower deductible may mean higher premiums, but it reduces out-of-pocket costs when you need to cover claims.
Reputation of the Carrier: Work with insurance companies that have a strong financial rating and responsive claims service.
The best way to ensure you’re getting the right protection is to work with experienced insurance agents who understand your industry and risk profile. At Darr Schackow Insurance, we tailor each policy to your unique needs, helping you navigate the many types of insurance available for your business.
Get Covered with Darr Schackow Insurance
At Darr Schackow Insurance, we understand that one lawsuit—justified or not—can threaten everything you’ve built. That’s why we’re committed to helping Florida professionals and small businesses find the right E&O insurance to protect against unexpected claims, legal expenses, and financial loss.
With access to top-rated insurance companies and decades of experience, our agents make it easy to secure tailored protection. Whether you’re just starting out or reassessing your current coverage, we’ll work closely with you to understand your business and match you with a policy that provides true peace of mind.
Don’t wait for a lawsuit to find out your coverage is incomplete. Contact Darr Schackow Insurance today to speak with a licensed agent and get a free E&O insurance quote—because protecting your business is our business.