Errors and Omissions Insurance


Errors and omissions are the mistakes made by professional persons in the delivery of their service offerings. An example might be the instance of a real estate agent failing to disclose that an adjoining property had been rezoned for a purpose that might impact property value.

Insurance for this type occurrence by a doctor, lawyer, accountant or architect would be referred to as Professional Malpractice insurance. With other professionals, it’s called Errors & Omissions insurance. In an increasingly litigious world, errors and omissions insurance may provide a firewall for brokers and agents.

While more and more companies are recognizing the need for coverage from this type of claim, many independent insurance and real estate sales professionals are still operating with no professional liability coverage. If a claim is filed against an agent who doesn’t have E&O coverage, the result can be professionally and financially disastrous. Common claims filed against range from misrepresentation to failure to negotiate effectively.

Preparation is Key

To reduce your risk of lawsuit, you should prepare as well as possible:

  • Be consistent with your paperwork- Develop a standard practice and stick with it. If it can be shown that sometimes you document your advice to clients and sometimes you don’t, then your clients version of what was said may be more credible than your own.
  • Know your product- Make sure that you understand the product or service that you sell and make sure that it meets the client’s needs.
  • Know your policy- Gain comfort that you understand your risks and you understand that your risks are covered. If your policy doesn’t cover all exposures, such as possible penalties, consider looking further for a policy.


Be aware that you will be covered only for an honest mistake, oversight or omission. You will not be covered for:

  • Intentional acts
  • Fraudulent acts
  • Pollution
  • Property damage
  • Personal injury
  • Claims arising from “customers” internal to your operations
Rebecca Kincaid

Rebecca Kincaid

Rebecca Kincaid is a Chartered Life Underwriter specializing in life insurance for business and estate-planning services. In addition to providing consultative support, she also acts as the Director of Life Sales for Tarkenton Financial, with a background that also includes regional management and sales positions with leading insurance firms such as Parker & Company and Old Mutual Financial Network.