It’s important to avoid confusion concerning the difference between Errors & Omissions (E&O) and Professional Indemnity (PI) insurance cover. 

The key to understanding if your client requires an E&O extension under a General Liability policy, is distinguishing whether they are a manufacturer.

Types of PI and liability policies

Professional Indemnity insurance covers the insured against the consequences of a breach of professional duty, particularly allegations of negligence.

Negligence-based PI policies generally cover losses where it can be shown that the insured owed a duty of care to the claimant and that the insured breached that duty causing the claimant to suffer loss or damage.

However, a PI policy will not cover claims arising from the supply of goods, including the physical construction, manufacture, installation, repair or maintenance services.

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