Need US based Professional Indemnity Insurance (E&O) for UK Client , Recommendations?

[ddddmmm]

Hi everyone,

I'm about to sign a B2B contract between my US-based LLC (I live‌ in Europe) and a UK company (IT services). The client is asking that I obtain‍ "Professional Indemnity Insurance" with a coverage of £1 million GBP before we move forward.

I'm currently based in Europe, but my LLC is registered in the US, and I'll be⁠ invoicing the UK client monthly.

I believe the equivalent of Professional Indemnity Insurance in the⁤ US is called "Errors & Omissions Insurance" (E&O). If anyone can confirm that, I'd appreciate⁣ it.

I asked ChatGPT for help, and it suggested the following providers that offer E&O⁢ insurance for tech professionals and freelancers:

US-based E&O insurance providers (suggested by ChatGPT):
- Hiscox︀ – https://www.hiscox.com
- NEXT Insurance – https://www.nextinsurance.com
- Thimble – https://www.thimble.com
- Embroker – https://www.embroker.com
- TechInsurance – https://www.techinsurance.com (broker platform for tech businesses)

My questions:
1. Can anyone confirm︁ that E&O insurance in the US is indeed equivalent to the UK's Professional Indemnity Insurance?︂
2. Has anyone here obtained E&O for international (UK/EU) contracts through a US LLC?
3. Any important policy details or exclusions I should watch out for?
4. Are there hidden︃ costs or minimum terms when purchasing?
5. Would you recommend bundling it with Cyber Liability︄ or General Liability?
6. Do these providers issue certificates of insurance acceptable for UK clients?︅

Any tips, lessons learned, or provider recommendations would be incredibly helpful. Thanks a lot in︆ advance!

 

[Martin Everson]

Insurance for you personally or US entity as its not 100% clear?

Professional Indemnity insurance in UK typically looks like the below.

https://www.axa.co.uk/business-insurance/professional-indemnity/

E&O is more a subset⁠ of coverage as you can see below in US.

https://axaxl.com/insurance/industries/professional-services

Your best to ask them⁤ what type of risks they need you or your entity to have cover for.

 

[ddddmmm]

Thanks for the links and the follow-up questions that I need to⁣ ask. The insurance my potential client is asking is for the US entity, since it's⁢ the deal will be with my company, not with me directly.

 

[churumbelo]

I had exactly the same issue a couple of months ago. I found an agent‌ and got me the E&O insurance for $500/year.

https://insureyourcompany.com/

The policy covers $1,000,000 for Each‍ Wrongful Act and a total Aggregate Limit of $1,000,000 for all claims during the policy⁠ period. There is also a Retention of $10,000 for Each Wrongful Act, which is⁤ the amount you must pay for covered damages and/or claim expenses for each wrongful act⁣ before the policy begins to pay. The Retention will not reduce the Limits of Liability.⁢

Key Coverages of Your Policy:

• Professional Liability: Covers claims for errors, omissions, or negligent︀ acts in the provision of your professional services, including failures in their function and security︁ wrongful acts.
  
• Data Privacy and Network Security Liability: Protects against claims for the improper handling of nonpublic personal information, violations of data privacy laws like GDPR, and︂ network wrongful acts resulting in intrusions.
  
• Defense Coverage: Provides you with the right and︃ duty to defend covered claims, including the right to select defense counsel under certain conditions,︄ with our pre-approval (which will not be unreasonably withheld).
  
• Early Intervention Costs: At our︅ discretion and with your consent, covers expenses to investigate a wrongful act that might lead︆ to a claim, which will reduce the Limits of Liability.
  
• Business Interruption Loss: Covers︇ loss of income and extra expenses resulting from a network outage, including intentional shutdowns︈ to minimize or avoid damages or as required by a governmental entity.
  
• Crisis Management Expenses︉: Covers the costs of a crisis management firm to handle reputation and legal obligations︊ after a data privacy wrongful act.
  
• Cyber Extortion Expenses: Covers reasonable expenses, including cyber extortion payments, in response to a credible cyber extortion threat.
  
• Cyber Investigation Expenses︋: Covers costs for a third party to investigate the source or cause of data︌ privacy or network incidents and services from a PCI Forensic Investigator.
  
• Data Privacy Regulatory Expenses︍: Pays legal fees, fines, and penalties arising from regulatory proceedings for violations of data︎ privacy laws.
  
• Data Restoration Expenses: Covers costs to restore, replace, or recover electronic data️ altered, destroyed, stolen, impaired, or erased due to a network intrusion.
  
• Notification and Identity Protection‌ Expenses: Covers expenses to notify individuals about a data privacy wrongful act and to‍ offer identity protection services.
  
• PCI Expenses: Covers fines, expenses, assessments, or fraud reimbursements⁠ required under payment card agreements due to data privacy or network wrongful acts.
  
• Post Incident⁤ Remediation Expense Extension: Reimburses additional costs to improve security after a covered incident, with⁣ an aggregate limit of $5,000 in addition to the main Aggregate Limit.
  
• Recall and Replacement⁢ Coverage: Allows costs for recall, upgrade, replacement, repair, correction, completion, or re-performance of enterprise︀ services to be considered damages in certain situations, especially if you were not given the︁ opportunity to cure or were unable to do so.
  
• War Exclusion with Cyber Terrorism Carve-Back︂: The general exclusion for war does not apply to acts of cyber terrorism, which is defined as premeditated use or threatened use of disruptive activities, including cyber extortion︃ threats, to demand payment, cause network intrusion, or violate data privacy laws for stated objectives.︄
  

 

[ddddmmm]

Thanks, I ended up going with Hiscox for an E&O︀ policy. Hiscox was the only one I could find that offered insurance for activities performed︁ outside the US (which will be my scenario), provided the claim is raised in the︂ US. Also, I didn't like the idea of having an intermediary when dealing with insurance.︃ I found multiple "proxy" companies that basically offer the products of insurance company "A" but︄ under a white-label-ish product. With Hiscox, I found their E&O insurance being offered through multiple︅ partners on different websites, sometimes even cheaper, but that means that should I ever have︆ a problem/claim, I'd need to go through the proxy/partner. So... I decided to pay more︇ but get the product straight from the main provider.

Am I wrong? I don't know.︈ Open to hear opinions from other travelers

 

[churumbelo]

Could you please tell me where you contracted with Hiscox and how much you pay?‌ That was one of the options I was trying to go through, but their website‍ kept blocking me since I’m not based in North America. This intermediary seems to be⁠ the best option I could find. As you mentioned, I’ll need to go through the⁤ intermediary for anything I might require.

 

[ddddmmm]

I used their website:⁣ https://www.hiscox.com through the `Get quote` button. Based on the options you choose about your activity,⁢ they may not offer you the quote online and ask you to call them (eg:︀ if you plan to do Financial Activities). But if you manage to get to the︁ end of the quote, you're offered the link to pay and from there everything is︂ automated. In a less than an hour I got the policy in my email.

The price was around 1000USD/year.

 

[churumbelo]

I could⁢ not get through the process when I tried a few months ago. The website is︀ blocked because of my IP is not from specific countries, so I had to use︁ a VPN. But still, they requested (online) some data, like a US phone number, etc,,︂ that I do not have. So I gave up. In any case, I pay half︃ that price with the other company, which is The Hatford.

 

[ddddmmm]

good to know, I contacted The Hartford through phone and they told me⁣ they wouldn’t cover activities rendered outside the US, so it was a no-go for me.⁢

I’d recommend you double check that, although I think the agent I talked to was︀ rather incompetent, so take my comment with a grain of salt.