What are the main risks covered by E&O insurance ?

Errors and Omissions (E&O) insurance protects against a wide range of risks associated with providing professional services. While the specific risks may vary depending on the profession and the type of service offered, several main categories of risks are typically covered by E&O insurance :

1. Professional negligence is the most common risk associated with E&O insurance. It covers situations where a professional fails to exercise the skill or care expected of their profession, resulting in a loss to the client. For example, a lawyer who misses a crucial deadline in a legal matter causes harm to their client.
2. Errors or omissions in the provision of services : Cela concerne les erreurs factuelles, les calculs incorrects, ou l'omission d'informations importantes dans le cadre de la prestation de services. Par exemple, un comptable qui commet une erreur dans une déclaration fiscale, entraînant des pénalités pour son client.
3. Inadequate advice: This risk covers situations where professional advice is incorrect or inappropriate, causing a loss to the client. For example, a management consultant who recommends an ineffective and costly business strategy.
4. Breach of duty occurs when a professional fails to fulfill their client's obligations as agreed or reasonably expected. For example, a real estate agent must disclose important information about a property to a potential buyer.
5. Misrepresentation : This risk covers situations where a professional makes inaccurate statements about their services or the results the client can expect—for example, a marketing consultant who overstates the potential results of an advertising campaign.
6. Breach of confidentiality : Many professionals can access confidential client information. E&O insurance can cover claims resulting from the unauthorized disclosure of this information, such as a psychologist who accidentally discloses confidential information about a patient.
7. Project Delays : In some cases, E&O insurance can cover claims resulting from significant delays in completing a project if those delays cause financial loss to the client.
8. Design Errors : For architects, engineers, and professionals, E&O insurance can cover plan or design errors that lead to implementation problems.
9. Technology Errors : For IT professionals, E&O insurance can cover claims resulting from software problems, system failures, or security breaches.
10. Misinterpretation of Client Needs : This can include situations where a professional must understand the client's requirements or goals, leading to a service or product that does not meet expectations.

It is important to note that coverage can vary by policy and insurer. E&O insurance generally does not cover intentional, fraudulent, or dishonest acts. It is designed to protect against unintentional errors and omissions made in good faith in the performance of professional activities.

Finally, understanding these risks can help professionals implement more effective risk management practices, reducing the likelihood of claims and potentially reducing E&O insurance premiums.