In fields where Errors and Omissions exposure is common, policies are sometimes provided by an employer. At other times, a professional will be expected to purchase his own policy. Having this coverage may be a requirement of employment in some cases, and in other situations – such as doctors and Medical Malpractice insurance – it will be required by law.
Whether the policy is purchased by the professional or provided by the employer can depend on a number of factors. Larger financial firms, for example, may find it cheaper and more expedient to provide group coverage for employees. A small practice with only one or two people who require the coverage may decide that insurance is a cost that should be borne by the employee.
If an individual is working as an independent contractor, then it makes more sense for that person to purchase his own coverage. Local laws and licensing regulations may also have rules about how Errors and Omissions coverage is provided.
If an individual purchases his own insurance policy, the business may not be covered (also called “indemnified”) if a client chooses to sue both the individual and the employer regarding a mistake or problem. For this reason an employer may want to purchase Errors and Omissions Insurance so that it also covers suits triggered by the actions of its employees.
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