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Professional liability insurance

Errors & Omissions Insurance FAQs

If you make an error, we’ll make it better.

Frequently asked questions about Errors & Omissions insurance

Learn more about errors & omissions insurance with some of the most frequently asked questions we get about our coverage.

If you have more questions, our licensed, U.S.-based insurance advisors are ready to help.

When you’re ready to explore coverage options for your business, you can get an instant quote online and purchase insurance within a few minutes.

 

What are the main differences between E&O and Professional Liability insurance? How do I know which one to choose?

Errors and omissions (E&O) insurance and professional liability insurance provide the same coverage.

There are many terms for this type of insurance mainly because each industry is different and has unique types of professional mistakes that need to be covered.

In general, E&O insurance is used when describing this coverage for professions such as real estate and insurance professions. Professional liability insurance is used when describing accountantsconsultantsengineers and architects.

Here are some instances in which you might need E&O insurance for your business:

  • The owner of a property claims that you made repeated mistakes on the paperwork for transitions between tenants that cost him $50,000 and he wants to be reimbursed.
  • You forgot to inform a client of the deadline to renew a personal auto insurance policy. A day after the policy expires, the client crashes into another car, causing significant damage.
  • A former client sues you, claiming professional negligence that has led to financial damages. Even though the suit is without merit, you must respond to any subpoena requests, prepare a defense and potentially appear in court.

 

Does E&O insurance cover my subcontractors or employees?

Your employees are covered by your E&O policy but only for the professional services they deliver for your business.

For example, you own a real estate business and one of your employees sells a house with high radon gas exposure. They would be covered if the person who buys the house decides to sue for failing to disclose this defect.

Your contractors may be covered but it depends on the details of your specific policy. Check the “Who is an insured” section of the “Definitions” part of your policy to make sure.

 

Is E&O insurance legally required?

E&O insurance is typically not required for your business but there are some variations depending on what state you live in and what industry you’re in.

If you’re a realtor who sells expensive office buildings your risks are high and your clients may require you to carry insurance in order to provide financial protection in case of a lawsuit.

If you’re unsure if it’s a legal requirement in your state, you can call one of our U.S.-based, licensed insurance professionals at 855-222-5919 or email us at support@nextinsurance.com to help determine the type and amount of coverage you need.

 

If I already have General Liability insurance can I add E&O insurance as a package deal?

Yes, we offer up to a 10% discount when you add an E&O policy to your general liability insurance policy or any other existing policy.

You can add E&O insurance directly through your online customer account. Or you can call us at 855-222-5919 or email us at support@nextinsurance.com.

 

Do real estate brokers need to carry E&O insurance?

The rules for real estate brokers vary across the different states. Real estate E&O insurance is required in these states:

  • Alaska
  • Colorado
  • Iowa
  • Idaho
  • Kentucky
  • Louisiana
  • Mississippi
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • South Dakota
  • Tennessee

Even if you don’t work in one of these states, however, E&O insurance can help your business. Commercial and residential properties are expensive transactions and the potential for disagreements turning into legal actions are higher than in other professions.

If you do face legal trouble, E&O insurance can help pay for your defense fees and judgments (up to your policy limits).

 

Will E&O insurance cover me if it’s my fault?

Errors and omissions insurance is designed to provide coverage for your mistakes, even if you are at fault. Unintentional negligence, or honest mistakes on your part, is why E&O policies exist.

Note: You will not be covered for intentional or criminal acts.

 

Do you offer prior acts coverage?

Depending on your industry, we may provide prior acts coverage for businesses that have maintained continuous E&O coverage at similar or higher limits since the requested retroactive date.

This means that if you first report an E&O claim related to negligent acts in the past you can still receive coverage from NEXT.

 

Can I add an additional insured to my E&O policy?

All NEXT policies include the ability to automatically add an additional insured.

If you have a contract in place with another person or company requiring you to list them as an additional insured on your insurance policy, they are automatically covered under your NEXT policy.

Depending on your industry, you can also add a specific person or company to your Certificate of Insurance by clicking “Share proof of insurance” from your online customer account.

You’ll be asked if you need a general proof of insurance or one with a venue or client as additional insured. As soon as you input the details of the additional insured, you can add their email address and we’ll send them over the certificate for you.

Any person or company that you add to your policy is referred to as an additional insured. They are named on your certificate, and only have a certificate if you send them either a physical or electronic copy of the certificate.

 

Will my premium change or my policy be cancelled if I file a claim?

No, we won’t alter your premium during the term of an active policy or cancel your coverage due to a claim. We understand that filing a claim is stressful enough without having to worry about it affecting your premium.

At the end of your policy period, however, we will review the details of your business and claims activity. If either has changed since you first applied, we’ll adjust the premium up or down.

 

How do I file an E&O claim?

If you are a NEXT customer, you can file a claim with your account online.

After we receive your claim, we will call you to get additional details. You are also welcome to call us to report a claim: 855-222-5919.

If you are not a NEXT customer, you can report a claim in our help center or call us.

It’s important to file E&O claims and potential claims as soon as possible, as E&O is typically claims-made coverage. This means you’ll have financial protection for incidents during the active policy period and a retroactive start date. The claim must be made during the coverage period.