Errors and Omissions Insurance

Definition

Errors and Omissions Insurance is a type of insurance obtained by the architect to protect against claims resulting from errors and omissions in the preparation of contract documents.

Purpose

The purpose of Errors and Omissions Insurance is to provide financial protection for architects and their firms against potential legal claims and liabilities arising from mistakes or oversights in their professional services. This insurance helps cover legal defense costs, settlements, and judgments.

Examples of Use

• Design Flaws: Covering costs if an architectural design error leads to structural issues.
• Specification Mistakes: Protecting against claims if incorrect materials are specified, leading to project delays or defects.
• Documentation Errors: Providing coverage for errors in contract documents that result in project disputes.

Related Terms

• Professional Liability Insurance: Another term for errors and omissions insurance, covering professionals against claims of negligence.
• General Liability Insurance: Insurance that covers general business risks but not professional errors.
• Risk Management: The process of identifying, assessing, and mitigating risks in a project.

Notes

• It is essential for architects to maintain up-to-date errors and omissions insurance as part of their risk management strategy.
• Coverage limits and exclusions vary, so policies should be reviewed carefully to ensure adequate protection.