Errors and Omissions Insurance protects your company from claims if your client holds you responsible for errors, or failure of your work to perform as promised in your contract. Coverage includes legal defense costs, no matter how baseless the allegations. Errors and Omissions Insurance will pay for any resulting judgments against you, including court costs, up to the coverage limits on your policy. Errors and Omissions Insurance coverage extends to both W2 employees and 1099 subcontractors, and can be worldwide in scope.
At its most basic, D and O insurance protects directors and officers from liability arising from actions connected to their corporate positions. Due to general expansion in the industry, market pressures and the industry's responses to the development of case law, D&O insurance has expanded beyond its original and basic coverage. Thus, a single policy now may provide multiple and varied options by standard form or endorsement. D&Os typically are subject to distinct terms, conditions and deductibles, and even may be subject to distinct policy limits or sublimits. For example, D &O insuring agreements generally specify that coverage is limited to claims first made during the policy period. In addition, the insurer typically does not have a duty to defend but is required to cover the costs of the insured's defense.