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 work doesn't meet specifications or causes financial losses.

E&O insurance is different from general liability insurance. While general liability covers physical damage and bodily injury, E&O specifically protects against professional negligence and mistakes in the contractor's work or advice.

What E&O Insurance Covers

E&O insurance typically covers situations where a contractor makes professional errors such as design mistakes, failure to meet building code requirements, incorrect specifications, or failure to complete work according to contract terms. For example, if an Ottawa contractor designs a deck that doesn't meet Ontario Building Code requirements and needs to be rebuilt, E&O insurance would cover the additional costs.

The coverage also protects against failure to obtain proper permits. If a contractor in Kanata starts work without getting required City of Ottawa permits and the homeowner faces stop-work orders or fines, E&O insurance can cover these costs and delays.

Why This Matters for Ottawa Homeowners

When hiring contractors in Ottawa, ask specifically about E&O coverage in addition to general liability and WSIB clearance. This is particularly important for complex projects like additions, structural work, or secondary dwelling units where professional judgment and code compliance are critical.

Many contractors carry general liability but skip E&O insurance because it's more expensive. However, contractors doing design work, project management, or giving professional advice should carry this coverage. This includes general contractors overseeing multiple trades, as well as specialized contractors like those doing structural work or complex HVAC installations.

Verification Process

Unfortunately, there's no central database to verify E&O coverage like there is for ESA licenses (esasafe.com) or WSIB clearance (wsib.ca). You'll need to request a certificate of insurance directly from the contractor showing current E&O coverage. The certificate should list coverage amounts, typically ranging from $500,000 to $2 million.

Red Flags to Watch For

Be cautious of contractors who can't provide proof of E&O insurance for professional services, especially those offering design-build services or managing complex renovations. Also watch for contractors who claim their general liability covers everything - it doesn't cover professional errors.

For verification of other required coverage, check ESA licensing at licensing.esasafe.com for electrical contractors, TSSA certification at tssa.org for gas work, and WSIB clearance through the contractor's WSIB account.

Contact the City of Ottawa Building Code Services at 613-580-2424 if you have questions about whether your contractor's insurance coverage is appropriate for your specific project type and permit requirements.