Mistakes Your Errors and Omissions Policy Doesn’t Cover
Errors and omissions insurance is designed to protect you from having to pay court costs and legal fees when someone at your company is accused of a mistake that results in damages to a client. There are some mistakes, however, that your New York E&O policy won’t cover. This coverage doesn’t help you if an employee at your company commits a wrongdoing that is intentional or illegal.
Intentional acts of error or negligence are not covered by your insurance. If you own a dry cleaners, for example, and you misplace a customer’s skirt but change the ticket to look like it was never brought in, your policy is not going to back you in your deception. Likewise, intentional failure to keep a commercial building up to code could mean that your E&O policy doesn’t help you when electrical problems put your tenants’ business in jeopardy.
Likewise, no insurance policy is going to cover illegal actions. If you commit fraud, your behavior exceeds the limits of a mere error that would be covered by your New York E&O policy. Any illegal act that results in property damage or negatively affects a client in any way is going to cost you money out-of-pocket and may even land you in jail.
Any error or omission covered in your policy must be unintentional. E&O only covers honest mistakes.