Professional liability insurance, also called errors and omissions (E&O), covers claims that your professional advice, recommendation, or delivered work product caused a client a financial loss. This is distinct from physical injury or property damage, which general liability handles.
Who Needs It
Common scenarios where E&O responds: - A consultant's recommendation leads to a business decision that loses money - A designer's error causes a client to miss a deadline - An accountant's mistake results in a tax penalty - A software developer's code has a flaw that causes data loss
It's Increasingly Required
Client contracts in consulting, technology, design, accounting, and similar fields increasingly include a clause requiring the service provider to carry E&O coverage. It's not a nicety - it's a prerequisite for being hired.
Claims-Made Basis: What That Means
E&O policies are written on a claims-made basis - meaning the policy in force when the claim is filed (not when the work was done) is the one that responds. This means continuous coverage is important; a gap can leave past work unprotected even if the work was done while you were insured.
The retroactive date on a claims-made policy matters. Ask your agent what date the policy covers back to. The NC Department of Insurance recognizes professional liability as a required coverage for many licensed professionals operating in North Carolina. Explore E&O insurance options or contact IronHaven to review your professional liability coverage.
