Errors and Omissions Insurance
Errors and Omissions Insurance protects your business if a client claims your professional services caused them financial loss. Whether due to an error, missed deadline, bad advice, or failure to deliver on promised work, this coverage can help pay for legal defense, settlements, and judgments.
Protect Your Assets with Error and Omissions Insurance
At AutoRisk, we provide tailored insurance solutions that allow business owners to operate with peace of mind, knowing their assets and liabilities are covered by experts who understand the unique demands of the automotive industry.
States We Provide Insurance Coverage:
Colorado – California – Texas – Wyoming – Arizona – New Mexico – Utah – Kansas – Missouri – Oklahoma – Arkansas – Idaho – Iowa – Indiana – Nebraska – Nevada – North Dakota – South Dakota – Montana
Who Needs Errors & Omissions Coverage?
A selection of insurances, called generally “Statute and Title Errors and Omissions” is recommended for auto dealers as they face certain risks not present to other businesses. These products provide coverage for economic damages not based on bodily injury, personal or advertising injury, or property damage. Simply put, they cover economic damages for negligent violations of truth in lending laws, odometer statutes and lemon laws.
Why Your Business Needs It
Professional risk is unavoidable. Clients expect perfection but human error, miscommunication, or unrealistic expectations can lead to claims.
Legal defense costs are expensive. Even groundless lawsuits can require tens of thousands in attorney fees.
Contracts often require it. Many vendors, partners, and clients won’t do business with you unless you carry E&O insurance.
General liability insurance doesn’t cover professional mistakes. A standard GL policy covers bodily injury or property damage, not negligence, advice, or performance disputes.
How to Structure Your E&O Policy
When customizing an E&O policy, consider:
Industry and professional scope – Tailor policy language to match your specific services and risk exposures.
Coverage limits – Common limits range from $250,000 to $5 million, depending on your client contracts and exposure.
Retroactive date – Protects past work performed before the policy’s start date, provided you’ve maintained continuous coverage.
Claims-made coverage – Most E&O policies operate on a “claims-made” basis, meaning the policy must be active when the claim is reported.
Deductibles – Typically range from $1,000–$25,000 based on risk tolerance and business size.
Don’t leave your coverage to chance, work with an expert who understands auto dealer operations.
What is Covered?
What E&O Insurance Covers
E&O policies vary by profession, but generally protect against:
Negligence or mistakes in professional work or advice
Failure to deliver services as promised
Misrepresentation or omission of information
Violation of good faith or fair dealing
Incorrect advice or documentation
Claims of negligence even when unfounded
Coverage typically includes:
Legal defense and attorney fees
Court costs and settlements
Damages awarded to clients for covered claims
What is Truth in Lending coverage?
Truth in Lending covers for damages due to an error or omission causing a breach in the Truth in Lending Act portions of the Consumer Credit Protection Act. This is a federal law requiring certain information, such as annual interest rate and loan term, be factually and accurately disclosed to borrowers like car buyers.
What is Odometer Statute coverage?
Odometer Statute coverage: covers damages arising from a failure to comply with Title IV Odometer Requirements of the Motor Vehicle Information and Cost Savings Act, and local state laws on the same subject. The law was passed to address shady practices from certain dealers who would ‘roll back’ high mileage vehicles to make those vehicles more attractive to buyers. Although these practices are not common today, this coverage is still available.
What is Lemon Law coverage?
Lemon Law coverage: covers damages arising out of a buyer’s statutory right to return a vehicle for failure to perform adequately.
What is Prior Damage Disclosure coverage?
Prior Damage Disclosure coverage: covers damages for negligent acts, errors or omissions resulting from non-compliance with federal or state statutes requiring disclosure of prior damage to a sold vehicle. The insurer’s obligation is limited, however, to the difference between (1) the vehicle’s market value as represented when sold to the purchaser, and (2) the actual market value of the vehicle accounting for the prior damage.
Trap for the Unwary
Everyone should read their policies carefully. In the case of statutory title E&O coverage, the typical form covers liability for an “act, error or omission” as a defined term. The term is usually defined to cover only negligent acts, not intentional ones. Moreover, coverage would not be provided for liability assumed under contract.
What It May Not Cover
While broad, E&O insurance doesn’t protect against every type of claim. Common exclusions include:
Intentional wrongdoing or fraud
Bodily injury or property damage (covered under general liability)
Employee injury claims (covered by workers’ compensation)
False advertising or trademark infringement (may require media liability)
Employment-related issues such as harassment or discrimination
Your broker can help you understand specific exclusions and endorsements relevant to your business.
Benefits of Working With AutoRisk
Hundreds of Clients Nationwide | Fast and Responsive Advisors | Transparent Coverage with No Surprises
Custom Policy Design
We customize your coverage based on your business operations, risk exposure and geographic location with the goal of reducing your claims.
Industry Expertise
We specialize in automotive business risk management. Our team understands the automotive industry and delivers solutions to reduce claims and save money.
Competitive Pricing
We work with specialized underwriters and carriers to offer the most coverage for your dollar, helping you stay profitable while staying protected.
Claims Support That Works for You
In the unfortunate event of a loss, our subject matters experts will help you though the claims process, minimize downtime, and recover value efficiently.
Learn More About the Insurance Required to Protect your Business
Dealers Open Lot Insurance | Errors and Omissions | Garagekeepers | Garage Liability | Commercial Auto | Employee Liability | Property | Workers’ Compensation | Pollution Liability | Cyber Liability | Rental Insurance | On-Hook Towing | Cargo Towing | Vehicle Leasing | General Liability | Excess Liability
