D&O and E&O: What’s the Difference?

d&o vs e&o

When it comes to insurances which cover the legal fees involved in claims of negligence, wrongdoing, poor advice, etc., there are two types of policies you usually see: D&O and E&O. The coverage for both seem quite similar, but there is a difference between the two. Whichever one you need depends on your business, and you may even need both, so comparing D&O vs E&O can be important when choosing insurance programs.

Directors and Officers

Usually shortened to D&O, this type of insurance focuses coverage on the directors and officers in your business. Often times, those with more control in your company can be held personally responsible for a client’s financial loss. If a director or officer makes a call which leads to bad results, for example, a client could make a claim against that particular employee.

Errors and Omissions

Also known as Professional Liability or abbreviated as E&O, this policy provides coverage for the actions of all the employees a part of the company and wrongful acts. You may ask why you would need to bother with D&O if E&O covers everyone in the company, but there’s a vital difference when it comes to D&O vs E&O: the first covers executive decisions and personal claims, while the second covers claims against the actions in regards to directly provided services to customers.