It is not only doctors or engineers who need professional liability insurance (also known as errors and omissions or E&O). Those who are governed by a professional order such as the Collège des médecins or the Ordre des ingénieurs are required to carry such insurance in order to be allowed to practice. Those who do not practice a profession but another trade are not obliged to do so but may wish to obtain it.
If a company causes property damage or bodily injury in the course of its business as a result of an accident, the company’s general liability (GL) insurance comes into play. This would be the case for an electrician whose work causes a fire and results in property damage to a building.
If there is no property damage, bodily injury or accident, the conditions for liability insurance are not met. Here are two examples:
- A client alleges that a company’s work contained errors that caused the client to incur expenses to have the errors corrected and claims the expenses from the company;
- An individual believes that his reputation has been damaged by information contained in a company’s report and claims moral damages.
In both cases, there is no property damage or bodily injury, nor is there a sudden and accidental event. Only errors and omissions insurance could cover these claims. Errors or omissions that do not result in an accident or property damage or bodily injury may still result in other financial consequences that need to be protected.
