California Property & Casualty Broker-AgentCasualty InsuranceEasy
A doctor is purchasing a Professional Liability policy. They are concerned about claims arising from medical malpractice. Which component of a typical Professional Liability policy would directly address this concern?
- AEmployee Benefits Liability Coverage
- BProducts-Completed Operations Coverage
- CErrors and Omissions (E&O) Coverage
- DPremises Liability Coverage
Show answer & explanationAnswer & explanation
Correct answer: C. Errors and Omissions (E&O) Coverage
Professional Liability policies, often referred to as Errors and Omissions (E&O) or Malpractice insurance, are specifically designed to cover claims arising from actual or alleged negligent acts, errors, or omissions in the performance of professional services.
Why the other options are wrong
- A. Employee Benefits Liability covers errors in administering employee benefit plans, not professional malpractice.
- B. Products-Completed Operations is part of CGL and covers liability from products sold or work completed, not professional advice or service.
- D. Premises Liability is part of CGL and covers bodily injury on the business premises, not professional mistakes.
Errors and Omissions (E&O) Coverage
A type of professional liability insurance that protects individuals and companies against claims made by clients for negligent acts, errors, or omissions in the performance of professional services.
- Covers professional negligence.
- Also known as Malpractice Insurance for medical professionals.
- Protects against financial loss due to a professional mistake.
Memory trick: For professional errors, E&O is the coverage that cares.