Businesses often are confused between an Errors and Omissions (E&O) policy and a D&O policy.
An E&O policy covers mistakes, errors and omissions committed by a professional or an organisation due to negligence, which results in a loss suffered by a client. Errors & Omissions insurance policy covers the professionals, employees, partners, and the professional’s company or partnership for damages directly caused by providing or failing to provide professional services.
The main difference between both insurance policies is that the D&O liability insurance is designed to financially help individual directors, officers and senior executives in the event they are subject to legal costs resulting from a lawsuit, while the E&O insurance protects mistakes made by a business and its employees in delivering professional services.
While the D&O liability insurance protects for liabilities of directors and pay for their financial losses, the E&O insurance protects the company and pays for losses suffered by the company.
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