Sometimes things don’t exactly go as planned, especially when small children are involved. If you run a daycare, there are a lot of moving pieces … and people. That is why it’s so important to make sure that you have the right insurance for your daycare business. One of the coverages that needs to be considered is errors and omissions (E&O) liability. Many small businesses need this type of insurance, but how does it apply for a daycare? And, well, what exactly is E&O insurance? We’ll give you an overview of what you need to know about errors and omissions insurance and daycares.

What is errors and omissions liability?

Errors and omissions insurance, or E&O, goes by a few different names. One name that you might hear is professional liability insurance. What this means is that it covers your, well, professional risks — risks that might not be covered elsewhere in your childcare insurance plan. The thing is that lawsuits come in all shapes and sizes — well, okay, typically they’re not small, they’re actually pretty expensive. Errors and omissions coverage can cover you if someone claims that you did not provide an adequate level of service, or alleges that you were negligent in providing your services. These sorts of claims may not be covered under your daycare general liability policy, and that’s why you need to make sure that you’ve got the coverage to protect your business against these sorts of claims and lawsuits. 

(Something important to note is that most E&O policies are on a claims-made basis, so they cover claims that are made against the insured during the policy’s term. That makes E&O a bit unique in the insurance world. Pay special attention to whether your policy has a retroactive date — if it does, the police will only cover acts committed on or after the date laid out in the policy. Just something to pay attention to.)