The cost of contractor errors and omissions insurance depends on a number of factors, including the type of business you run, your industry, and coverage limits. While the price range can vary widely, most small business owners can expect to pay annual premiums between $400 and $1,000. Contractor Errors and Omissions (E&O) coverage is protection for claims when a contractor`s work is allegedly defective or defective and is installed or incorporated into other products or goods, resulting in loss associated with the replacement or post-processing of the defective work. Contractor Errors and Omissions Insurance is designed to help fill some of the gaps left by general liability insurance for commercial purposes. Contractor E&O does not duplicate the coverage for damages that commercial general liability insurance already covers. This includes liability for: If you are a general contractor, contractor, or construction manager, you may be looking for professional liability insurance for contractors. For more information, see our article « Contractors` Liability Insurance: Everything You Need to Know. » As you can see, points A to C list three different covers. These covers are errors or omissions in the design work; incorrect processing; and the use of defective materials or products in your work. The policy then lists the damages it will cover as a result of these three categories of claims. Blocks coverage of a claim that may arise from a reported circumstance. In the event that your company is held liable, E&O will bear the costs of repairing or repeating the defective work, as well as the legal defense against these claims. It is important to note that Contractors E&O is different from professional liability insurance, which covers design or consulting errors. Contractors often get coverage for contractors` errors and omissions at: In the past, coverage for errors and omissions was not widely available and affordable for small entrepreneurs.

Now HSB provides small contractors such as plumbers, electricians, painters, finishing carpenters, heating/ventilation/air conditioning professionals, selected specialist dealers and other quality assurances. No matter how experienced you have or how careful you are, mistakes can happen. If the client suffers financially as a result of your mistake (due to project delays, loss of revenue, relocation costs, etc.), the contractor`s E&O policy will cover your liabilities arising from the situation. No coverage, except for software created or modified as part of your design, work or installation. Without contractor errors and omissions coverage, you can potentially suffer costly financial losses as well as reputational losses. Make sure your business is fully protected with this valuable extra coverage. Since these combination guidelines are common, we want to emphasize that an E&O contractor does not mean that the policy also covers pollution. Unless you specifically purchase a policy that covers both E&O and pollution, this type of claim is not covered. But what do these three coverages mean for your business? Here`s more information about each of them: Either way, most entrepreneurs` E&O policies include common features. Contractors E&O covers damage to your work, product or damaged property that occurs after the order has ended and is due to your negligence, errors or omissions. As an entrepreneur, you know that mistakes can happen and a small mistake could damage or destroy thousands of dollars of your work. Contractors` Errors and Omissions Insurance is designed to provide financial protection against damage to your work caused by your errors, negligence or omissions.

For more information on the types of insurance companies they need and details on when they need these coverages, check out our overview, « A Guide to Insurance for Entrepreneurs in 2021. » For example, suppose you provide services that include not only installing a project, but also designing work before installation. Or maybe you give recommendations for the sizing of specific products or materials (recommendations on sizing the size of pipes, recommendations for mechanical equipment, etc.). If that sounds like you, this coverage applies to your business. Work done by subcontractors is usually not covered, and you may want to encourage your subcontractors to take out their own error and omission insurance. Coverage is limited to the contractor`s owners and employees, including partners, officers, directors, managers and workers. Inaccuracies in auctions can have a catastrophic impact on your business. If you neglect the specifications when bidding on projects or if you make a mistake that results in the work being undercutted (which in turn results in a loss to your business on a project), the contractor`s E&O policy does not cover these errors. Some insurers offer contractors limited coverage for their liability, which relates to damage to their work, products they may install, or damaged property. Since there is no shortage of construction liability claims, insurers willing to provide this limited coverage typically limit their target marketing to commercial contractors – electricians, plumbers, and heating and cooling systems – if the exposures are not catastrophic. There is no standard form for contractor errors and omissions insurance. .