Businesses that provide certain types of services to clients need more than commercial general liability insurance to protect them against lawsuits. Some types of lawsuits, including those related to errors in the professional services that you provide, are explicitly excluded from coverage in your other South Carolina small business insurance policies.

While general liability insurance protects against a broad range of potential damage, professional services firms in South Carolina need more coverage to protect against lawsuits related to negligence or wrongdoing in the work that they do.

Errors and omissions insurance is designed for this purpose. An independent insurance agent in South Carolina can help you find errors and omissions insurance.

What Is Errors and Omissions Insurance?

Errors and omissions insurance in South Carolina is a type of specialty liability insurance that is necessary for certain individuals and companies that provide professional services. It is also referred to as professional liability insurance.

In the case of errors and omissions insurance, “professionals” are considered to be those who have special knowledge or skill in a certain area, and who use that skill to provide advice and services to others. Traditionally, doctors, lawyers, architects, engineers, and accountants were considered to be “professionals” for insurance purposes. But as lawsuits related to allegedly faulty business services have proliferated, errors and omissions insurance is becoming equally important for a wide variety of professions.

Today, South Carolina businesses including advertising and public relations firms, internet service providers, web hosting companies, IT firms, and many more may need errors and omissions insurance. Actuaries, real estate agents, insurance agents, appraisers, mortgage and securities brokers, business consultants, and many other types of professionals also often purchase professional liability insurance to protect their livelihoods if they’re accused of negligence.

What Does Errors and Omissions Insurance Cover in South Carolina?

Your South Carolina commercial general liability (CGL) offers broad coverage for a wide range of lawsuits, but it does not cover claims related to errors or negligence in professional services.

Professional liability insurance in South Carolina eliminates this gap in coverage. It covers professionals, their partners, their employees, and the partnership or corporation for damage caused by providing or failing to provide professional services. This can include instances of providing erroneous advice, making errors in the services you provide, or even if a client loses money due to an act of negligence or an omission your part.

If you provide professional advice and services, errors and omissions insurance protects you in cases of actual or alleged errors, loss of client data, negligent oversell, undelivered results, work mistakes, system failures, or making misleading statements.

A professional liability policy in South Carolina covers the costs associated with your legal defense if you are sued, as well as any judgments that are rendered against you or settlements that you must pay to the injured party. Most errors and omissions policies can be customized for your particular area of expertise and the risks you face.

What Doesn't Errors and Omissions Insurance Cover in South Carolina?

Errors and omissions policies in South Carolina will vary depending upon your profession and your insurance carrier. It is important to remember that professional liability coverage is designed to protect you from liability claims that are directly related to the provision of professional services and any resulting financial loss for a client. Losses that are covered under some other type of insurance policy (e.g., general liability, commercial automobile, or worker's compensation claims) are not covered by errors and omissions insurance in South Carolina.

This means that you’ll need to have numerous types of business liability insurance to make sure that all of your liability exposures are covered.

What’s more, errors and omissions policies in South Carolina usually exclude coverage for:

Who Needs Errors and Omissions Insurance in South Carolina?

There are about 418,000 small businesses in South Carolina, employing nearly 795,000 people.

Many of these local companies will need errors and omissions insurance.

Essentially, any business that provides a professional service or regularly gives advice to clients should at least consider errors and omissions insurance in South Carolina. If you’re expected to have a certain level of training or expertise and your clients rely on your professional advice, errors and omissions insurance is important to protect your business.

This includes lawyers, doctors, architects, IT professionals, real estate agents, brokers, consultants, and engineers. What’s more, advertising or marketing professionals, designers, construction firms, and others frequently purchase errors and omissions insurance.

In addition, local or state licensing boards or federal laws may require some professionals to have professional liability insurance.

How Much Does Errors and Omissions Insurance Cost in South Carolina?

The cost of professional liability insurance in South Carolina depends on a variety of risk factors that are unique to your business, including your industry, your coverage limits, your location, how many employees you have, your experience in your profession, and your claims history.

• Industry risk: The higher the risk for your industry, the higher your premiums will be. Consider the risks faced by an accountant vs. an advertising agency.
• Coverage limits: Policy limits vary and can be anywhere from $250,000 to $2 million. The higher the policy limits, the higher your premiums will be.
• Your location: If you’re located in an area with a high claims rate, you may pay more for coverage.
• Number of employees: The more employees you have, the higher your risk for a professional liability claim. Professional services firms with more employees may pay more for coverage than similar firms with fewer employees.
• Professional experience: Experienced professionals may pay less for errors and omissions insurance than new businesses or individuals new to their profession.
• Your claims history: If you have a history of professional liability claims, your professional liability insurance premiums are likely to be higher.

How to Get Errors and Omissions Insurance in South Carolina 

Errors and omissions insurance is very complex and requires the help of an insurance professional with specialized knowledge and experience. An independent insurance agent can make sure your errors and omissions policy is tailored to the risks you face, and can examine your entire business insurance program to recommend top-quality, comprehensive coverage.

You will need to work closely with your South Carolina independent insurance agent to make sure your policy fits your needs.