Errors & Omissions Insurance Complete Guide

Errors & Omissions (E&O) is coverage that protects a medical practice against claims that a professional service provided caused a client/patient to suffer financial harm due to mistakes (errors) or failure to perform a service (omissions).

Defending a practice in a civil suit with certain damages awarded, E&O insurance can cover the cost, even if the legal action is groundless. For medical facilities, E&O is required by law in many areas.

Errors and omissions coverage applies if a practice/facility includes any of the following:

  • Managed care-related activities
  • Utilization review
  • Expert witness
  • Billing operations
  • Credentialing
  • Surgery center/laboratory
  • Consulting
  • Claims review
  • Medical director services
  • Not for profit
  • Management services
  • Employee leasing
  • Independent physician associations
  • Miscellaneous and/or other ancillary activities not normal to a medical practice

What Is Covered in E&O Insurance

Most E&Os insurance coverage provide the following:

  • Lawyer fees
  • Court fees
  • Administrative expenses such as documentation costs
  • Settlement or the judgment claim awarded against the practice

How Much Does Errors & Omissions Insurance Cost

The cost of E&O insurance is dependent on many factors, such as:

  • Practice size:A practice with a large number of professionals may be subjected to higher risk, and thus, higher costs will be involved.
  • Revenue:When a practice generates a large amount of revenue, the risk is also large.
  • Specialty: Some medical specialities may have higher chances of error and omission as compared to other specialities.
  • Claim history: A practice with a history of suits will be required to pay higher insurance costs.
  • Coverage limits: High coverage limits are accompanied by higher insurance costs.