Key Takeaways

  • An errors and omissions disclaimer limits liability for mistakes, oversights, or inaccurate information in professional content or services.
  • E&O disclaimers work best when combined with errors and omissions insurance, which covers costs from claims alleging professional mistakes.
  • Disclaimers should be clearly written, legally sound, and placed where users can see them—like emails, websites, or contracts.
  • Some professions and industries are required by regulation or contract to carry E&O insurance coverage.
  • E&O disclaimers are not bulletproof shields and may not protect against lawsuits without supporting insurance or legal documentation.

An errors and omissions statement (E&O), or disclaimer, helps protect your company and its workers against claims or lawsuits made by clients for inadequate performed professional services, including errors, omissions, or failure to perform professional services.

Are Errors & Omissions Statements Effective?

Many companies are now using E&O statements, or disclaimers, on their websites, in contracts, or in license agreements. This might theoretically protect a company from lawsuits, but not always. Disclaimers are most effective when written by a lawyer and supported with a professional liability insurance policy.

For example, a company may include a disclaimer on their website that the information on the site is for “informational purposes only.” This might offer some protection from legal actions; however, a customer could still claim that they suffered monetary damages and file a lawsuit. The company would then incur all the legal costs associated with their defense. If they don't have an E&O insurance policy, they could suffer major financial setbacks just from the cost of the lawsuit. And if the court finds them liable for the mistake or omission, they would also have to pay the settlement amount.

Where and How to Use an Errors and Omissions Disclaimer

An errors and omissions disclaimer is commonly used in contracts, professional reports, websites, and email communications to clarify that a company or individual is not liable for unintentional mistakes or omissions. To maximize its effectiveness:

  • Visibility is key: Place the disclaimer in easily accessible locations like website footers, terms and conditions, or the signature of a professional email.
  • Language should be plain and clear: Avoid legalese when possible. The disclaimer should be understandable to a reasonable reader.
  • Tailor disclaimers to the context: For example, a consultant might include a disclaimer noting that information provided does not constitute legal or financial advice.
  • Reinforce with policy links: If your business has broader legal terms or privacy policies, link to them in the disclaimer.
  • Maintain consistency: Ensure all platforms (website, documents, emails) reflect the same or compatible disclaimer language.

Despite their benefits, disclaimers cannot fully prevent claims. If a user believes they were harmed by your services, they may still pursue legal action—making insurance a crucial backup.

What Is Errors & Omissions Insurance?

Error and omissions coverage is a form of professional liability insurance. Most people are likely more familiar with other forms of professional liability insurance, such as malpractice insurance used in the healthcare industry. However, since the 1970s, the need for other types of professional liability protections in industries outside of healthcare has increased.

Companies that offer professional services to customers use E&O insurance. In these cases, the professional liability insurance protects the company if a customer claims that they incurred economic damages due to services the company provided or failed to provide, or even if the services failed to meet the expected results. Depending on the level of financial damage, this coverage can help your company avoid significant financial losses or even bankruptcy.

Some examples of monetary damages where a company might be liable include:

  • Breach of agreed upon parameters or contracts
  • Performance perceived to be under par
  • Lack of due diligence
  • Alleged dishonest acts of employees
  • Failure of internal risk controls

This coverage differs from comprehensive general liability insurance because it protects your company from claims due to economic damages or money loss. E&O insurance doesn't require tangible physical damage to make a claim. In fact, most policies deny coverage for claims due to injuries or property damage. What's more, a well-written E&O policy will complement your liability insurance by filling a material gap in coverage.

Examples of E&O Disclaimer Language

Crafting a concise and appropriately worded errors and omissions disclaimer is essential. Here are some examples commonly used in professional settings:

  • Website Disclaimer:
    “The information provided on this website is for general informational purposes only. We make no warranties regarding accuracy or completeness. We are not liable for any errors or omissions.”
  • Email Disclaimer:
    “This message and its contents are for informational purposes only and do not constitute legal, accounting, or other professional advice. The sender disclaims all liability for any errors or omissions.”
  • Service Disclaimer:
    “Our services are provided as-is. We are not responsible for outcomes resulting from the use of our service, including any inaccuracies or incomplete data.”

These examples may need to be customized based on your business type, industry regulations, and jurisdiction. It's wise to have a legal professional review your disclaimer.

Should Your Business Have Errors & Omissions Insurance?

Many companies and businesses need E&O insurance coverage. Examples of some of these services include:

  • Accountants
  • Architects
  • Auction house appraisers
  • Cable or satellite providers
  • Consultants
  • Financial advisors
  • Financial planners
  • Insurance agents
  • Insurance brokers
  • Insurance underwriters
  • Internet providers
  • Investment advisors
  • Lawyers
  • Mechanical engineers
  • Private equity companies
  • Real estate agents
  • Real estate appraisers
  • Securities brokers
  • Server hosting companies
  • Software designers
  • Venture capitalists
  • Web hosting companies

Some industries are more at risk for professional liability, so they may find E&O insurance more expensive or less favorable in its terms, such as financial services, insurance services, and information technology. Also, some regulatory organizations, such as the Financial Industry Regulatory Authority (FINRA) might require a company to have E&O insurance.

Legal Limits of E&O Disclaimers

While errors and omissions disclaimers provide a layer of protection, they are not legally binding in all situations. Courts may refuse to enforce a disclaimer if:

  • It was not clearly visible or communicated to the affected party.
  • The disclaimer attempts to waive liability for gross negligence, willful misconduct, or illegal acts.
  • It contradicts consumer protection laws, such as unfair business practices statutes.
  • It was included in a contract of adhesion (i.e., a take-it-or-leave-it agreement with unfair terms).

Furthermore, disclaimers cannot replace the need for proper professional conduct or due diligence. In regulated industries (like finance, healthcare, or legal services), disclaimers alone may not satisfy compliance obligations.

What Is Covered by Errors & Omissions Insurance?

Many insurance providers customize their E&O policies to meet the needs of the business. This allows them to define specific protections for the professional services the business offers.

Depending on the policy and issuing insurance company, the benefits of your E&O statement will vary. In general, this insurance usually covers judgments, defense costs, and settlements up to a specified amount. Many policies also help companies with legal costs due to any formal regulatory or administrative proceedings in connection with these claims.

Of course, E&O insurance doesn't cover all liabilities. Some examples include:

  • Acts performed by temporary employees
  • Bodily injury or property damage
  • ERISA violations
  • Illegal acts committed that violate any state regulation or law
  • Illegally gained company or personal profits
  • Intentional wrongdoing or harm, including fraudulent or criminal acts or omissions
  • Liability assumed under a contract

Frequently Asked Questions

1. What is the purpose of an errors and omissions disclaimer? It helps reduce legal risk by stating that the business is not responsible for mistakes, inaccuracies, or oversights in provided services or content.

2. Can an E&O disclaimer protect against lawsuits? Not fully. While it may reduce liability, it doesn’t prevent someone from filing a claim. E&O insurance is a critical supplement.

3. Where should I display an errors and omissions disclaimer? On your website’s footer, email signatures, contracts, or documents—where it’s clear and accessible to users.

4. Are E&O disclaimers legally enforceable? Sometimes. Courts will consider whether the disclaimer was fair, visible, and reasonable. It won't protect against gross negligence or intentional wrongdoing.

5. Do all businesses need E&O disclaimers and insurance? Not all, but they are strongly recommended for businesses offering professional advice or services, especially in high-risk or regulated industries.

If you need help with errors and omissions statements, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.