E&O vs. D&O vs. EPLI: When is Each Coverage Needed?

Without the proper coverage, your entire business is open to a huge lawsuit if someone happens to get hurt while on your property or while working, or if your business’s professional services lead to a loss for a customer or client. And only half of all businesses will survive more than five years, according to The Bureau of Labor Statistics.

That’s why a business needs to stick together with their workers as a team and make sure that everyone has the proper coverage. But which insurances are needed? There are E&O, D&O, and EPLI needs to be considered. All three coverages are different, and offer protections for different risk exposures. A comprehensive business insurance plan will comprise all three policies. Here’s what you need to know.

Directors and Officers Insurance

Think of this policy as the Errors and Omissions policy, but for a higher tier of employees and executives. So if you’re on the board or you’re some type of executive, this coverage is perfect for you. This means that both products cover allegations of negligence. D&O is there to protect high-level decision makers when someone asserts they were negligent in their duties as an officer or board member. E&O, on the other hand, covers acts, errors, and omissions committed by employees of the company.

D&O policies may cover these certain types of claims:

  • Stagnant investments that deter retirement plans.
  • Failure to follow the by-laws.
  • Defamation by a board member or officer.
  • Improper dispersal of insurance proceeds or other funds.

What is the Difference Between E&O Insurance and D&O Coverage?

The biggest difference between the two is who exactly is getting covered. E&O focuses heavily on the products and services that a business offers, while the latter is strongly meant for management decisions only.

For example, if someone were to buy a new home and not follow all protocol in order to completely obtain the house, this could become an E&O claim. But if the owner of a huge real estate company decides to bad mouth and defame another mogul on television that could easily be considered a D&O claim.

The takeaway? The two coverages do not overlap. Each policy covers different areas of claims, making both a crucial aspect of your business’s risk management and insurance plan.

What About Employee Practices Liability Insurance?

While D&O and E&O insurance policies cover claims made against the business by customers and clients, EPLI covers claims filed from within the company. Whoever is involved in the entire work process is effectively protected with the EPLI insurance they need to succeed at their job. This policy may cover claims over:

  • Wrongful termination
  • Discrimination
  • Sexual harassment
  • Invasion of privacy
  • Inappropriate discipline or demotion
  • Infliction of emotional distress
  • Retaliation

About Transparity Insurance Services

Transparity Insurance Services was founded for the purpose of helping clients to ensure their property and assets with no hassle. We are committed to providing a simple, easy, efficient, and positive experience to all of our clients, and prioritize open and transparent communication with our clients. Through our excellent customer service and technology, we can help you to find the right insurance program at a competitive price. Contact us today at (855) 889-2037 to learn more about what we can do for you.