Filling Gaps: Errors & Omissions for Contractors

At first blush, the very term “general liability” might strike you as a big enough blanket to cover just about any ordinary event from a insurance standpoint.  After all, “general” is right there in the name, right?

Well, not so fast, friend.

A general liability policy does offer coverage of a fair scope of routine exposures, but not all.  For those who make their living as contractors to outside clients, additional coverage in the form of an errors and omissions (E&O) insurance policy many times makes financial sense.

An E&O policy for contractors covers the policyholder for negligent acts and omissions that may harm his or her clients. An E&O policy is also known as a professional liability insurance (PLI) policy, and is often deemed an essential coverage for professionals who provide a service for a fee.

For example, say a contractor did a substandard job installing equipment for a business client.  Under general liability coverage, it would be up to that contractor to replace the work at cost.  But with E&O coverage, the contractor’s insurance provider would be able to pay the claim, thereby saving the contractor those out-of-pocket costs.

E&O coverage fills a potentially significant financial gap for contractors.  A word of warning, however – it can be difficult to acquire this additional coverage if the contractor has been subject to similar issues with clients in the past.

It’s always a good idea to see where any possible gaps in your liability coverage may exist.  Talk with the professionals at The Reschini Group to learn more.

Copyright 2020 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.