# Understanding E&O Insurance



## toscottm (Jan 11, 2007)

Hi All,

As 'experts' (the level of which varies depending on your experience, qualifications, etc.) arborists are faced with a level of responsibility to customers and the public at large. We all seem to strongly recognize the legal responsibility related to workmanship (i.e. dropping a tree on someone's house), however responsibility related to consulting (i.e. hazard assessment, preservation planning, installation specification, construction supervision, etc.) can be somewhat confusing. Even those whose operations are purely service (felling and removal) businesses should consider their errors & omissions risks (i.e. accidental wrongful removal - wrong tree, neighbours tree, etc.).

Once errors & omissions are fully appreciated and you wish to arrange insurance coverage, be sure to obtain the proper form of coverage. This type of coverage comes in many variations. It may also be confusing as some people refer to it as 'malpractice' or 'professional' liability insurance. I'm not going to get to the semantic differences here, let's just look at the coverage differences.

Some E&O policies cover financial loss only. Meaning that if your error or omission results in reduced real estate value, loss of amenity (i.e. value of shade, privacy screening, etc.), etc., this is the extent of protection. Of course as an arborist this will be a concern but is probably secondary to the worry that a 'mistake' would result in injury or damage resulting in liability far greater than just financial harm. When arranging E&O coverage, be sure that the protection includes all these risks. Do note that some advisors might suggest that 'injury and damage' is the point of general liability insurance and not errors & omissions insurance. Usually they are only partially correct. The intent of general liability insurance is to provide coverage related to workmanship - if you cause injury or damage 'while' working or as a 'result' of your work. Thus if you worked on tree A and later tree B fails causing injury and the client sues alleging that you should have warned them that tree B was a hazard because you should have noticed this while on site, most general liability policies will not respond - this was an 'omission', it was not a failure of your work done to tree A.

The last point is to suggest that you look at E&O insurance in the reverse context to it's name. It is much more likely that a lawsuit will allege 'omission' than 'error'. Also recognize that none of us is perfect, from time to time we will all make mistakes. Most don't result in any harm but we should be honest with ourselves about the possibility and be prepared accordingly for the potential legal fallout.

Anyone with thoughts to add?

Scott


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