Why Contractors Need Errors & Omissions Coverage
No matter what kind of contractor you are, Contractors Errors & Omissions is essential to your financial protection.
Let’s talk about what Errors & Omissions insurance is, what it covers, and why it’s so important for all contractors — whether carpenters, electricians, landscapers, plumbers, or painters — to have this crucial protection.
What is Contractors Errors & Omissions coverage, and why is it important to have?
Contractors Errors & Omissions (E&O) coverage protects contractors when their work is claimed to be faulty, defective, or negligently done.
No matter how careful a contractor is, mistakes can still happen. Contractors E&O coverage provides protection for claims when a contractor’s work is allegedly faulty or defective, is installed or incorporated into other products or property causing a loss associated with the replacement or reworking of the defective work.
Essentially, this insurance protects your work when there are claims of carelessness or mistakes and supplements coverages provided by general liability insurance to protect contractors from big financial losses and damage to their reputation.
Consider the following examples.
Carpet Installer: Imagine a flooring contractor installs the wrong carpet by mistake. The installer then needs to remove it and put in the correct carpet, resulting in a $3,000 loss.
Fence Contractor: If someone misreads a site plan and a fence gets installed beyond the property line, the fence would need to be removed and reinstalled, resulting in a $35,000 loss.
Even the most careful contractor can make mistakes. E&O insurance helps protect your business from the financial fallout of mistakes, such as costs associated with correcting your work and potential legal fees. Plus, it can help maintain your strong reputation as a dependable, trustworthy contractor with proper protections in place! In addition to general liability, E&O is an important coverage for contractors who want to make sure their work, reputation, and bottom line are protected.
Finding the Right Coverage for Your Business
There’s a lot to consider when selecting insurance for your business. The best way to ensure you get the coverage that’s right for your business and needs? Chat with an independent insurance agent!
Independent agents work with you to determine the best coverage options for your business and its unique needs. Try our Find an Agent tool to find an independent insurance agent near you!
This blog was adapted from an earlier version, originally published on July 27, 2020. It was last updated on November 18, 2025.
