If you want to protect yourself and your business from a potential lawsuit, you might be wondering what your options are when it comes to insurance coverage. You might have heard of e&o vs d&o and wondered what the difference between the two is. Here is what you should know as you choose an insurance plan.
Understanding What E&O Covers
E&O is short for errors and omissions insurance. This can protect you and your business from paying expenses out of pocket that was the result of an error on your part (or someone who works in your office), according to transparity insurance services. E&O would be useful in protecting you if you made an accounting error that resulted in your client losing money.
Knowing How D&O Works
D&O insurance is short for directors and officers. If you are part of a board or an executive, this is necessary to have to protect you personally from potential issues that may arise. If you didn’t follow specific by-laws or were negligent in another manner as a director or officer, this coverage would protect you.
When considered e&o vs d&o, it is important to understand that the two coverages do not overlap. In order to be fully protected, you might need both just in case a situation arises.