01 / The meaning
What it means.
An error can be an incorrect calculation or statement; an omission can be failing to perform an agreed professional task. Neither automatically creates legal liability or an insured claim. The client’s alleged loss, the duties owed and the policy’s description of professional services all matter. Poor commercial performance alone is not necessarily a professional negligence claim.
Check whether the wording covers the work the business actually performs, including incidental advice and work completed by subcontractors. Contractual guarantees, refunds, rectifying the business’s own work and assumed liabilities may be treated differently from compensation owed to a client. Many policies operate on a claims-made basis, so a demand or known circumstance should be assessed promptly rather than left until the financial loss is finally calculated.
02 / Put it in context
A practical example.
Hypothetical example: a bookkeeper omits a scheduled filing and a client demands compensation for resulting costs. The business documents its instructions and notifications while the insurer assesses the professional services definition and relevant exclusions.
This example illustrates the term. It does not predict a claim outcome.
03 / Read the detail
What to check.
- Compare the alleged error with the insured professional activities.
- Check contractual liability, rectification and refund provisions.
- Identify the first complaint date and any earlier known circumstance.
04 / Start a useful conversation
A question for your broker.
Would this alleged mistake fall within our professional indemnity wording, rather than merely its E&O label?
05 / Connect the terms
Keep the meaning in context.
06 / Apply it to your business
Related insurance guides.
Further reading
Read the source guidance alongside the relevant policy wording.
General information only. This does not take into account your objectives, financial situation or needs. Before acting, consider whether the information is appropriate for you. Cover is subject to insurer acceptance and the policy terms, conditions, limits and exclusions. Read the Financial Services Guide and the relevant PDS (where applicable) and/or policy wording before deciding.
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