Errors And Omissions Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Errors And Omissions, written in plain English, along with examples of how it is used.
What is Errors And Omissions?
n. short hand for malpractice insurance which gives physicians, attorneys, architects, accountants and other professionals coverage for claims by patients and clients for alleged professional errors and omissions which amount to negligence.
History and Meaning of Errors And Omissions
Errors and Omissions (E&O) is a term that's existed for several decades but has only recently entered common parlance in the insurance world. Around the 1940s, however, malpractice suits on behalf of plaintiffs became more common, giving way to a need for an insurance policy that could protect the assets of those who worked in high-stakes professions.
E&O insurance makes it possible for professionals who provide advice or services to customers to continue their work without worrying about the possibility of legal action or pay the costs of a lawsuit. This insurance may be referred to as professional liability insurance in some countries.
Examples of Errors And Omissions
- After a doctor rudely refuses to provide follow-up care to a patient he treated, the patient sues the doctor for professional negligence.
- An accounts payable manager accidentally approves payments that haven't been properly documented, leading to accidental double payments and a lawsuit from vendors.
- A construction firm fails to supervise staff during a demolition project, leading to bystanders being injured and suing the company for professional negligence.
Legal Terms Similar to Errors And Omissions
- Professional Liability is another name given to Errors and Omissions or the insurance that covers it.
- Risk management: the method of identifying risk and designing strategies to address them.
- Duty of care: the responsibility that a professional, individual or institution has to prevent injury or harm to others.