E&O Liability Insurance
What is E&O Liability Insurance?
Errors and Omissions Insurance (E&O), also known as professional liability, protects a company against lawsuits as a result of the services performed for a fee.
Doesn’t General Liability or an Umbrella policy cover these types of losses?
No. Professional liability issues are not in the scope of a General Liability or an Umbrella policy. In the payments industry, the rule of thumb is that General Liability covers generally nothing.
A major payment processor suffered an outage and was unable to process any payments. As a result, ISOs and merchants lost revenue.
An ISV inadvertently infects its VARs with malware that releases clients’ proprietary information. As a result, the ISV is sued for damages by the VARs and their clients.
A glitch at a CRM causes proprietary information about the ISOs and its merchants to be disclosed. As a result ISOs lose merchants and revenue to a competitor.
Failure of a QSA or ASV service is alleged to be the cause of a data breach. A QSA or ASV can be held liable for all breach costs, defense, regulatory costs, damages, and lost revenue.
What types of companies need this type of insurance?
Any company that has sensitive or proprietary information about their clients, vendors, or anyone that could cause damage if it fell into the wrong hands.