You are now leaving our website and entering a third-party website over which we have no control.
Errors and Omissions Insurance for Canadian Business Owners
Running a business means juggling a lot of responsibility. Whether you’re a solo professional or managing a team of employees, clients count on your expertise to guide their decisions and deliver quality results. And while the goal is to provide services your clients can rely on, even well-intentioned efforts may not always align perfectly with those expectations.
That’s where Errors & Omissions (E&O) insurance comes in. Often called Professional Liability insurance, E&O insurance covers financial losses resulting from an actual or alleged error or omission in delivering professional services to a client. Unlike general liability insurance, which covers physical injuries or property damage, E&O is specifically designed to help when the issue is tied to the professional work you performed— which could be anything from misalignment on service expectations, guidance provided was not as expected due to a miscommunication, or an unintentional oversight.
In simple terms, E&O insurance helps protect your business from the ripple effects of professional errors. If your services could lead to a financial loss for a client, this coverage can help with the legal or correction costs that follow. It’s an added layer of protection that keeps prevents one misstep from becoming a major setback.
Do You Really Need Errors & Omissions Insurance?
Many business owners wonder whether Errors & Omissions (E&O) insurance is something they truly need. It’s a fair question—especially if you already carry Commercial General Liability (CGL) insurance. While CGL insurance covers things like bodily injury, mental injury or property damage, it does not cover professional services. Even if the act or omission is unintentional, it can still expose your business to legal action.
E&O insurance is designed to help fill the gap left by CGL policies and protect you from professional risks. It can help cover legal defence costs, settlements, or the costs to make any corrections—helping your business stay financially stable when things don’t go as planned. For many small business owners, even a single claim can be overwhelming, and E&O insurance can be the difference between continuing operations and experiencing serious financial strain.
In certain regulated professions across Canada E&O insurance is not just recommended, it is required. Professional associations often set minimum coverage requirements, and not carrying the proper insurance can lead to disciplinary action or affect your ability to continue to practice.
Beyond financial protection, E&O coverage can also strengthen your professional reputation. Many clients now expect businesses to carry this type of insurance and may even require proof before signing a contract. Showing that you’re insured signals professionalism, reliability, and a commitment to quality—helping you build trust and your business.
How Does Errors & Omissions Insurance Help?
Here are a few real-world examples from different industries to highlight the benefits of Errors & Omissions insurance coverage.
1. Graphic Designer:
You helped create a brochure for a client which included an incorrect URL resulting in customers being directed to an invalid website. This resulted in loss of revenue for the client and a lawsuit was filed. E&O insurance would help cover the legal defence costs and any related settlement.
You make a final report on operational staffing levels for an expanding business. That business follows your recommendations and finds that their expansion is unsuccessful because they didn’t have the right people in the right positions to meet the demand. They file a suit against you alleging financial losses and damaged reputation. E&O insurance would help cover the legal defence costs and any related settlement.
3. Contractor:
You are a contractor and employ a small team. One of your employees misread the plan for a job and installed a fence over the property line in the neighbour’s yard. E&O insurance would help cover the legal defence costs and any related settlement.
What does Errors & Omissions Insurance Not Cover?
While Errors & Omissions (E&O) insurance coverage can vary by insurer, here are some instances that might not be covered:
- Injury to your employees or employment-related claims
- Bodily injury or property damage (this is typically covered by a CGL policy)
- Fraudulent, intentional or criminal acts
- Pure breach of contract (i.e. failing to perform a service with no professional error involved)
Errors & Omissions Insurance Bottomline
Even the most experienced professionals may face unintended issues in the course of their work. Errors & Omissions insurance helps ensure that one unexpected setback doesn’t turn into a major financial burden for your business. Whether you're an Animal Care provider, Bookkeeper, Counselor or Contractor – your business is unique and so are your risks. TD Insurance is here to help. Speak directly with a licensed TD Insurance Advisor at 1‑855‑724‑2883 who can help you find the right coverage for your business.
FAQs
Errors and Omissions (E&O) Insurance also known as Professional Liability Insurance helps protect businesses against claims alleging professional errors, omissions, or negligence that result in financial loss to a client.
E&O insurance protection is less about the size of your business and more about the services you offer. If your small business provides professional advice, services or expertise to clients, E&O insurance is recommended to protect your business against claims from mistakes or negligence that could cause clients financial loss.
For flexible coverage options, speak to a licensed TD Insurance Advisor.
Or
Get started with a business insurance quote online.
The content on this page is for general information purposes only and does not constitute legal advice. Any coverages described herein may be subject to additional eligibility criteria, limitations and exclusions. In the event you make a claim, potential indemnification is also subject to the receivability of the claim and the type of coverage you bought.
In the case of conflict between the content on this page and your policy wordings, your policy wordings shall prevail. Please speak to an Advisor or consult your policy wordings for further details.