Errors and Omissions Insurance

Do you have a professional designation or do people seek your opinion in your field of expertise? Chances are, you have a professional liability exposure that is not covered by a standard commercial general liability insurance policy.

Even if you have never made an error or omission, if someone alleges you have, a professional liability policy will cover the expenses involved in defending you.

Errors and Omissions (E&O) policies are written on a ‘Claims Made and Reported’ basis, meaning that the policy that is in force at the time a ‘claim is made and reported‘ (as opposed to when the error may have been made) is the policy that would potentially respond.

As a condition of an E&O policy, it is imperative that you report actual claims or situations that may give rise to a claim to the Insurer and Gifford Carr as soon as they come to your attention. We have a 24hr emergency service to help get our clients started in the event of a claim – because we know emergencies don’t wait for the standard 9-5. So no matter when you need the support, we are here for you.

Limit of Liability: refers to the maximum an Insurer will pay for any single claim.

Aggregate Limit of Liability: refers to the maximum an Insurer will pay during a policy period.

In some cases, if multiple claims arise from one circumstance or error, an Insurer may consider all such claims as a single claim, for the purposes of applying the limit of liability.

If multiple claims arise in one policy period from separate occurrences, then the limit of liability will apply to each claim, and the aggregate limit of liability will apply as a maximum the Insurer will pay in one policy period.

Prior Acts refers to your professional activities that were performed prior to the binding of coverage through a policy. The policy can exclude any prior and/or pending litigation or prior knowledge of any claim or circumstance(s) that could give rise to a claim, and requires that a professional or firm have uninterrupted coverage (i.e. a gap in coverage may negate prior acts coverage).  This is achieved by acknowledging a “retroactive date”.

(See the next FAQ for details)

A retroactive date is a provision found in many claims made and reported policies that eliminates coverage for prior acts that occurred prior to a specified date. The retroactive date (if applicable) reflects the earliest date for which an Insurer will provide coverage.

An ERP extends the time period for which a claim can be reported after an advisor has retired or otherwise ceases to practice, for acts that occurred prior to retirement/cessation of practice.

Terms of the ERP vary from one policy to the next. Your liability does not cease because you are no longer practicing and as such an ERP is available for purchase in the following instances:

• Retirement or leaving the business and/or giving up a license/registration.
• Death (an estate may purchase the ERP on behalf of a deceased agent as long as it is within the 30 days after the expiry of the policy).
• Disability (in which an insured gives up the license because they are no longer able to work).
• The firm or practice is sold.  It may be a requirement of the sale that the seller obtains an ERP.

Commercial General Liability (CGL) insurance is designed to cover the legal liability imposed on you or your firm for bodily injury or property damage claims to a third party arising from your operations.

Errors and Omissions (E&O) insurance is designed to cover damages and claims expenses for which you or your firm is legally obligated to pay due to a wrongful act.

Together, they form a comprehensive insurance policy package. Connect with your broker to understand your insurance and if the scope of your E&O risks are covered with your current policies.