Protecting Your Company From EO Claims

Companies across a wide variety of professional service industries need to protect themselves against claims related to errors and omissions. Claims of this nature can be costly to defend and carry high damages, so it’s important to adopt a well-managed risk mitigation strategy in addition to adding an E&O policy endorsement to a commercial insurance package policy.

Claims Associated With Negligence

Many common E&O claims are predicated on negligence. In these types of claims, a company is alleged to have negligently committed a mistake or to have failed to take important action in the performance of their duties. Some examples may include oversights in operation, errors in calculations, or failing to inspect work and follow standard quality control procedures.


While some E&O claims pertaining to miscommunication are grounded in negligence, others may be based on intentional misrepresentation of information. In addition, when a company fails to disclose important information to a client, it could be construed as a misrepresentation of material fact.

In order to protect themselves against potentially costly professional liability exposure, a company needs to secure a commercial package policy that will address claims related to errors and omissions. This vital protection may be a prerequisite to procuring contracts with individual clients, and it can safeguard a company against potentially significant loss.