Cyber Liability vs. E&O: Clarifying Digital and Professional Risk for Businesses

For modern businesses, managing professional risk requires understanding two distinct policies: **Errors and Omissions (E&O)** and **Cyber Liability Insurance** (Article 15). While both cover non-physical harm, they protect against completely different types of operational failures.

1. Errors and Omissions (E&O) / Professional Liability

**E&O** (or Professional Liability) covers claims alleging financial harm to a client due to a mistake, negligence, or failure to perform services as promised by your business or employee.

**Protects Against:** Negligence in your professional service (e.g., an accountant missing a tax deadline, a consultant giving bad advice).
**Trigger:** Failure to meet a professional standard of care, resulting in a client’s financial loss.

2. Cyber Liability Insurance

**Cyber Liability** covers the costs associated with the failure of your technology systems, such as data breaches, ransomware attacks, or system downtime.

**Protects Against:** Failure of your technology security (e.g., a hacker stealing customer data, a virus encrypting files).
**Trigger:** A security failure or system breach, resulting in both first-party costs (forensics, notification) and third-party liability.

The Overlap: Some complex claims blur the lines. For example, if a software company’s coding error (E&O risk) causes a data breach (Cyber risk), both policies might be triggered, emphasizing the need for both coverages.

Every service-based business needs **E&O** to cover mistakes, and every business that stores customer data needs **Cyber Liability** to cover system failure.