Skip to content
English
  • There are no suggestions because the search field is empty.

Who Needs Errors and Omissions Insurance in Canada?

Understanding which professionals and businesses benefit from this essential coverage

If your business offers advice, provides services, or develops solutions for clients, one misstep, or even just a misunderstanding — can lead to a costly dispute. That is why Errors and Omissions (E&O) Insurance, also called Professional Liability Insurance, is critical for many professionals in Canada.

Even with contracts, good intentions, and excellent results, clients may still claim that your work caused them financial harm. E&O insurance protects your business when those claims arise, covering legal costs and settlements so that one mistake does not become a major setback.

What E&O Insurance Covers

E&O insurance provides protection when a client alleges that your professional service or advice caused a financial loss. This could be due to:

  • Errors, omissions, or oversights

  • Failure to deliver services as promised

  • Breach of professional duty

  • Miscommunication or advice that leads to business consequences

Coverage typically includes legal defence costs, court fees, settlement payments, and judgment awards, up to your policy limits.

Note: This coverage applies even if the claim is unfounded. Just defending a case can be expensive, which is why E&O matters even for careful, experienced professionals.

Who Should Consider E&O Insurance?

In Canada, many service-based professionals are either required to carry E&O or strongly advised to do so because of the nature of their work. If your services impact your clients’ business operations, strategy, finances, or public image, you are at risk of being sued for losses.

Common roles that benefit from E&O coverage include:

  • Financial advisors and planners

  • Accountants and bookkeepers

  • Lawyers and paralegals

  • Architects and engineers

  • IT consultants and tech service providers

  • Management consultants

  • Marketing and public relations professionals

  • Designers, copywriters, and creative freelancers

  • Real estate agents and brokers

  • Healthcare professionals in private practice

Profession Risk Example E&O Required?
Financial planner Client sues over poor investment performance Often required by regulators
Marketing consultant Brand damage caused by an ad campaign Highly recommended for protection
Software developer Client loses data due to flawed code Common for tech contracts
Engineer or architect Structural error causes project delay Required by many licensing bodies
Legal professional Missed deadline or incorrect filing Professionally mandated
 
 Caution: Some industries have professional regulatory bodies that require E&O as part of licensing. Even in unregulated sectors, clients may require proof of coverage before signing a contract.

Why E&O Is Important Even If You Are Small or Independent

Freelancers, consultants, and small business owners are often the most financially vulnerable to legal action. Without the resources of a large firm, a single lawsuit can quickly drain time, money, and focus.

E&O insurance allows small businesses to:

  • Take on larger clients who require coverage

  • Manage disputes without personal financial risk

  • Build credibility and professionalism

  • Continue operating even during a legal dispute

Tip: If your contract includes clauses about indemnification or liability, that is often a signal that the client expects you to carry E&O coverage.

E&O Insurance Is Not Just for High-Risk Professions

Even low-risk or highly skilled professionals face claims due to unclear expectations, shifting project goals, or unexpected results. You do not need to make a major mistake to be sued — you only need a dissatisfied client who believes you did.

E&O coverage is an essential safety net. It allows you to work confidently, knowing you are protected from legal costs and reputational damage if something goes wrong.