Professional Liability
Service Errors Coverage
Service errors coverage, the E&O component of professional liability, protects your business when mistakes, oversights, or failures in your delivered work lead to client losses. This includes errors made by employees acting on your behalf and work that didn't meet contractual specifications, even when no professional advice was involved.
Coverage Principle
Service Errors Coverage should be reviewed against real exposure, not assumed from the coverage label.
The real issue is not whether the coverage exists; it is whether the limits, exclusions, eligibility rules, definitions, contracts, people, property, timing, and carrier requirements match how the risk actually shows up. When those details are not reviewed before renewal or enrollment, a policy can look complete on paper while the most important conditions remain unclear until someone tries to use it.
Professional Liability
What You Need to Know About Service Errors Coverage
Errors and Omissions
E&O claims arise when work is done incorrectly or incompletely, a missed deadline causes a client to lose a contract, a software implementation contains a critical flaw, a design error causes a rework. Coverage applies to these claims even without a formal advice relationship.
Vicarious Liability
You're responsible for errors made by your employees in the course of their work. If a junior employee makes a mistake on a client deliverable that causes harm, the claim comes to the business, and professional liability responds for covered errors.
Contractual Defense Obligations
Many professional service contracts include indemnification provisions that obligate you to defend clients against third-party claims arising from your work. Professional liability coverage addresses these defense obligations as part of the claim.