What does errors and omissions insurance cover for contractors?

Errors and omissions (E&O) insurance for contractors in Ottawa covers professional mistakes, oversights, and failures to deliver services as promised - protecting both the contractor and homeowner when things don't go according to plan.

E&O insurance specifically covers financial losses resulting from professional negligence, design errors, missed deadlines, failure to meet building code requirements, or inadequate workmanship. Unlike general liability insurance that covers physical damage or injuries, E&O focuses on the professional service failures that can cost thousands in corrections, delays, or legal disputes.

For Ottawa contractors, this coverage becomes crucial when dealing with complex projects involving structural work, electrical systems requiring ESA compliance, or gas installations needing TSSA certification. If a contractor makes an error in interpreting the Ontario Building Code requirements and the work fails City of Ottawa inspection, E&O insurance would cover the costs to correct the work and any resulting delays.

Common scenarios where E&O insurance applies include design flaws that require expensive corrections, failure to obtain proper permits through ottawa.ca/building portal, miscalculating load requirements for additions, or installing systems that don't meet ESA or TSSA standards. The insurance also covers legal defense costs if a homeowner sues for professional negligence.

When hiring contractors in Ottawa, ask specifically about their E&O coverage limits - typically ranging from $1-5 million. This is separate from their general liability and WSIB coverage. Contractors working on larger renovations, structural changes, or secondary dwelling units should carry higher E&O limits given the complexity of Ottawa's zoning and building requirements.

However, E&O insurance has limitations. It typically doesn't cover intentional wrongdoing, criminal acts, or standard warranty issues. It also may not cover work performed outside the contractor's licensed scope - another reason to verify ESA electrical licenses through esasafe.com/contractor-locator and TSSA gas certifications through tssa.org.

Red flags include contractors who don't carry E&O insurance, can't provide proof of coverage, or seem unfamiliar with the term. Legitimate contractors understand this professional protection is essential for complex work in Ottawa's regulated construction environment.

Before signing contracts, request certificates of insurance showing current E&O coverage. Your contractor should be able to provide this documentation just as easily as their WSIB clearance certificate. This extra layer of protection ensures you're covered if professional errors require expensive corrections or cause project delays.

For verification of all contractor insurance requirements in Ontario, contact the Financial Services Regulatory Authority of Ontario (FSRA) or consult with your own insurance broker about additional coverage for major renovations.