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E&O, D&O, and EPLI: When Does Your Business Need Each Coverage?

by Dan Hiralez on Jun 19, 2019

Scandals that arise make businesses realize the importance of adequate commercial liability coverage for potential mistakes made by their directors, officers, other managerial staff or by the company itself.

General liability is a broad commercial policy covering general liability exposures of a business, such as product liability, completed operations, premises and operations, and personal and advertising injury. All businesses should have general commercial liability insurance coverage in place. However, only having one form of coverage will leave a business vulnerable to costly claims.  It is recommended to look into additional commercial liability coverage available.

Professional Liability (E&O)

E&O covers professionals for negligence and errors or omissions that causes injury. Companies frequently have a professional liability exposure. Protect your company in the event that your negligence, error, or omission causes damage to a third party. Errors and omissions insurance is coverage that protects those people that give advice, make educated recommendations, design solutions or represent the needs of others.

Directors and Officers (D&O)

D&O covers directors and officers of a company for negligent acts or omissions and for misleading statements resulting in lawsuits against the company. D&O policies may be broadened to encompass employment practices liability.

The policy covers negligent acts, omissions or misleading statements committed by directors and officers of a company that result in lawsuits being filed against the company. D&O coverage can reimburse the company when it indemnifies directors or officers, to specifically cover directors or officers when the company doesn't indemnify them or can provide entity coverage to cover claims made specifically against the company.

Employment Practices Liability Insurance (EPLI)

Employment Practices Liability Insurance covers employment-related liabilities other than on the job injuries. This will cover legal fees and damages for  cases involving wrongful termination, discrimination, sexual harassment, and other alleged violations of employees’ legal rights.

EPLI can protect you when employees have sued the company for violating their legal rights as employees. Possible lawsuits include claims for sexual harassment, breach of employment contract, wrongful termination, discrimination and failure to hire or promote.  

Evaluate Your Risk

These three policies are part of a complete commercial liability coverage plan. Evaluate your risk to know what policies are right for you.

Consider the type of industry you're in, the size of your company, and the makeup of your company (your risk generally increases if you have shareholders).

Be sure to have your agent provide a risk assessment to apply to each type of coverage so that your exposure to errors, omissions, misstatements, fraud or employee rights violations are minimal.


About Integra Insurance Group

Integra Insurance Group is one of Arizona’s leading independent insurance agencies. Located in Peoria, Integra has provided reliable insurance services to families and businesses for many years. We work tirelessly to provide our clients with the best insurance coverage at competitive rates, all with personalized customer service. To learn more about what we can do for you, give us a call today at (623) 322-5955.

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