Errors and Omissions Insurance in Illinois

Errors and omissions insurance provides critical protection for professionals by covering a range of potential risks. Here’s an in-depth look at what this insurance typically covers:

1. Legal Defense Costs: One of the most significant benefits of errors and omissions insurance is coverage for legal defense costs. These expenses may include attorney fees, court costs, and other legal expenses that arise when defending against a lawsuit. Even if a claim is unfounded, the cost of mounting a defense may be substantial. 
2. Settlements and Judgments: In the event that a case is lost or settled out of court, E&O insurance covers the costs of settlements or judgments awarded to the plaintiff. This aspect of coverage is crucial as settlement amounts and court judgments may be significant, potentially reaching hundreds of thousands or even millions of dollars. 
3. Negligence Claims: Claims of negligence may arise when a client believes that a professional’s actions, or lack thereof, have caused them financial harm. This may include errors in advice, failure to deliver services as promised, or other acts of negligence. 
4. Errors and Omissions: This coverage specifically addresses claims related to mistakes or failures to perform a service as expected or agreed upon. For example, if a consultant provides inaccurate advice that leads to a client’s financial loss, or a real estate agent fails to disclose important information about a property, E&O insurance would cover the resulting claims. 
5. Breach of Contract: Professionals are often bound by contracts that outline their obligations and the services they are to provide. If a client alleges that the professional did not fulfill their contractual obligations, it may result in a breach of contract claim. E&O insurance covers these claims, protecting professionals from the financial implications of failing to meet contractual terms.