Errors and omissions vs. directors and officers insurance

Also called professional liability insurance or professional indemnity insurance, errors and omissions (E&O) insurance protects your business if you're accused of a mistake, oversight, or professional negligence. It's strongly recommended for businesses that provide professional advice or services to clients.

Errors & omissions covers claims related to:

• Work mistakes and oversights
• Undelivered services
• Missed deadlines
• Breach of contract
• Misrepresentation
• Data leaks

Directors and officers (D&O) insurance is a type of management liability coverage that provides reimbursement for defense costs (indemnification) for a business's officers and board members in the event of a lawsuit related to the decisions they make on behalf of the company.

Any business or nonprofit organization with a board of directors should strongly consider D&O as part of their risk management plan.

Specifically, some covered D&O claims include:

• Mismanagement of funds
• Employee grievances
• Breach of fiduciary duty
• Slander, libel, and copyright infringement claims
• Failure to follow organizational bylaws
• Failure to comply with regulations

In short, yes, a directors and officers insurance policy covers certain errors and omissions. However, this coverage only applies to directors and officers on the board from claims made against them for errors, omissions, misstatements, wrongful acts, or breaches of duty.

For total protection from work-related claims, you'd need E&O insurance to safeguard your company from lawsuits based on the professional services, decisions, statements, and advice you provide to your clients.

You can purchase both errors and omissions insurance and directors and officers insurance as standalone policies, or bundle them with other policies to save money.

IT and tech companies can combine E&O coverage with cyber insurance in a tech E&O policy. This bundle helps protect against claims over contract disputes, coding errors, and data breaches.

A D&O insurance policy, on the other hand, can be bundled with employment practices liability insurance (EPLI) and a management liability insurance policy.

It's easy to get free quotes for errors and omissions coverage and directors and officers insurance with Insureon. We'll ask for basic facts about your business to help find the right coverage to match your risks, budget, and state requirements.

For most policies, you can get quotes through our online application. If you're not sure what types of insurance policies your business needs, you can speak with a licensed insurance agent. Once you choose your insurance products, you can usually get coverage and your certificate of insurance within 24 hours.