Are these commercial coverages actually different?
If you own a company and are looking to secure the right business insurance in Michigan, then you have probably heard about professional liability insurance. However, you may have also heard this coverage referred to as errors and omissions (E&O) insurance. But are these types of coverage really the same? Here’s what business owners need to know about professional liability and E&O insurance.
- Professional Liability, E&O, and Malpractice Insurance
It’s important to understand that professional liability and E&O insurance are the same types of coverage. This coverage can also be referred to as malpractice insurance. The names can be used interchangeably, depending on the industry that your business works in. For instance, architects, accountants, and consultants usually use the term professional liability insurance. Real estate and IT professionals tend to call it E&O insurance. Those in the medical and legal sectors refer to the coverage as malpractice insurance.
- Different Names, Same Coverage
Regardless of what your industry calls it, professional liability insurance offers coverage for businesses who are accused of making costly mistakes by their clients. For instance, a business would access their professional liability insurance if a client holds it liable for breach of contract, work oversight or mistakes, providing substandard or incomplete work, missed deadlines, and so on. Even if there is nothing wrong with the quality of your work, a dissatisfied client could still sue your business for a perceived issue. Fortunately, your professional liability insurance would handle the cost of the claim, including legal fees, court costs, and settlement expenses.
- Why You Need This Protection
The most obvious benefit of professional liability insurance is that it helps you cover the cost of expensive claims. However, having this type of insurance can also help you be more competitive. Because many clients require companies to carry this coverage before hiring them, already having professional liability protection in place will increase the chances of earning their business.
This is what you need to know about professional liability and E&O insurance. Do you have additional questions about your business insurance in Michigan? If so, then contact the team at CIA Insurance and Risk Management. Our experts are ready to assist you with all your commercial coverage needs today.
Post written by Sophia Najjar, President | Commercial Risk Management (CRM)
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