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Errors & Omissions
The following claims examples provide common scenarios where a claim may occur under an errors and omissions liability policy.
Note: These Claims Examples are for illustrative purposes only. Please remember that only the insurance policy governs the coverage terms, conditions and exclusions.
Building Code Standards Not Met
A technologist was retained to design residential homes but the design was not in conformity with the applicable bylaws and building code provisions. All homes required a redesign as a result.
Third Party Claim
A houseguest incurred severe injuries when she slipped and fell down a flight of stairs. The technologist was third partied into the claim as he was the designer of the home where the incident took place. The allegations specified there were no handrails on the staircase.
A technologist was retained to provide consulting services for a roof replacement on an office building. After a heavy rainstorm, water entered the building from different locations and caused damage. The technologist was sued by the tenants of the building along with the owner, the contractor and a structural engineer.
Due to a calculation error in a residential design completed by a technologist, the space allotted for a staircase was insufficient to allow it to be built in accordance with applicable building code, and a substantial redesign was required.
Insufficient Support of Deck Railing
A deck railing designed by a technologist collapsed due to insufficient support to the rail posts, resulting in injury to a third party.
A technologist was accused of negligence when features designed for a commercial property resulted in significant drafts, requiring unexpected HVAC additions to remediate the unintended effect.
A project manager was retained to supervise the renovation work being done at a hospital. The hospital suffered major water damage due to the improper installation of 53 showers and sued the project manager for failing to properly supervise the construction work.
An occupational health and safety consultant was retained by a developer to report on safety precautions and risks at a condominium development site. The developer was sued following a major injury on site. The developer issued a third party claim against the occupational health and safety consultant alleging that the consultant’s recommended and implemented safety measures failed to adequately protect site personnel.
A quality control inspector was retained to perform quality control in the context of the construction of multiple office towers. The owner discovered the windows had been improperly installed and claimed against the inspector and other implicated parties for the costs of reinstalling the windows correctly.
Failure to Provide Notification
An individual purchased and financed a vehicle through a car dealership. Soon after, the purchaser fell behind on his payments and a collection agency repossessed the vehicle. The purchaser contested the seizure and sued the collection agency for damages alleging that he received no prior warning from the collection agency regarding the debt collection and only after the vehicle was repossessed did he receive a Repossession Warrant.
Failure to Provide Assessments
A mortgage broker invested in a number of mortgages on behalf of his client, the lender. The mortgages went into default and the lender lost its investment when the properties were sold. The lender sued the mortgage broker for failure to assess the borrower’s ability to repay the mortgage loans and for failing to properly assess the value of the properties being mortgaged.
Laser Eye Surgery Incident
An acupuncturist provided treatment to improve the degradation of vision in his patient’s right eye. A needle accidently penetrated the patient’s eyeball causing internal bleeding. Emergency laser eye surgery was performed to repair the eyeball. The patient sued the insured acupuncturist alleging the needle rendered him permanently blind in the right eye.
An acupuncturist provided acupuncture treatment for a patient’s back and hip problems which included inserting a needle into the location of the patient’s shoulder pain. After the last treatment, the patient developed chest pressure and shortness of breath and subsequently learned he suffered from a punctured lung due to the acupuncture treatment. The patient sued the acupuncturist alleging the acupuncturist was negligent in rendering the treatment.
A patient alleged that a sonographer had been negligent when performing a routine ultrasound during her pregnancy. More specifically, the patient alleged that the sonographer failed to detect a rare heart condition in the fetus. The sonographer, as well as the hospital and treating radiologist were all sued.
Blood Test Error
A patient alleged that she suffered damages to her biceps’ tendons following the blood test performed by a diagnostic laboratory. She sought damages for constant discomfort and the necessity to change her career as she had lost significant range of motion of her arm.
The provincial health care board advised a physician of the rules for periodic billing for a patient who was returning only for maintenance therapy. Sometime after implementing the billing practice, the physician received notice that his billing practice was not in keeping with the rules. The health care board issued a claim against the physician demanding retroactive reimbursement for these billings.
A homeopath was treating the patient for nasal allergies. The patient alleged that the homeopath administered a low dose of arsenic which caused a severe asthmatic attack. The patient sued the homeopath, alleging that the treatment should not have been provided given his pre-existing medical condition.
Failure to Provide Appropriate Treatment
A medical doctor was the treating physician of an Alzheimer’s patient. The patient’s family sued the doctor alleging he failed to evaluate the patient in a timely manner and failed to provide the appropriate treatment.
A nurse was retained to provide post-operative in-home care to a patient suffering from ulcers. The patient’s ulcers became infected, which resulted in the patient not making a complete recovery and then allegedly causing a loss of employment, loss of enjoyment of life and increased medical expenses. The patient sued the nurse alleging improper care.
A nursing placement agency assigned a nurse to provide live-in 24 hour per day home care to a patient suffering from Alzheimer’s disease. The patient managed to leave the home on her own and was found outside hours later having suffered injuries due to a fall. The patient and her family sued the nursing placement agency for negligence alleging that the agency failed to employ qualified personnel and failed to ensure that the nursing care met the standard appropriate for the patient.
A nursing placement agency assigned a nurse to a hospital to provide care for an elderly patient recovering from a surgery. The patient died shortly after. The family of the deceased sued both the nursing placement agency, for negligently providing an unqualified nurse, and the nurse, for failing to carry out the physician’s orders and for failing to take appropriate action when the patient’s vitals indicated distress.
As part of a patient assessment an occupational therapist recommended that the patient use a bath mat when showering. After a slip and fall on the bath mat in his shower, the patient commenced a lawsuit against the occupational therapist alleging she recommended the use of dangerous equipment and failed to instruct him on how to use it.
Religious Discrimination and Racism
An occupational therapist conducted a home assessment following an accident for which the patient was receiving benefits. The patient filed an application with the Human Rights Tribunal seeking compensation from the occupational therapist alleging that his behaviour and report were tainted with religious discrimination and racism.
Failure to Provide Proper Explanation
An optometrist was consulted by a patient inquiring about laser eye surgery. After proceeding with the surgery, the patient suffered from a rare side effect. The patient claimed damages, alleging that the risks of the surgery were not properly explained and that he would have refused to proceed with the surgery if he had been informed of all the risks.
Failure to Increase Prescription
An optometrist faced a breach of standards of practice complaint lodged with the Disciplinary Committee of the provincial regulatory body by a former patient. The patient alleged that the optometrist failed to increase her lens prescription, leading to eye strain and headaches.
While filling a routine prescription, a pharmacist accidentally dispensed double the requested dosage. The patient used this incorrect dosage for three months before the mistake was discovered. The patient instituted a lawsuit against the pharmacist alleging serious and permanent injury.
A pharmacist dispensed an incorrect dosage of an antidepressant drug to a patient. The patient sued the pharmacist for this error, claiming that it caused severe mental stress, mood swings and aggressive outbursts, which ultimately led to the patient losing his job.
Failure to Provide Appropriate Treatment
A physiotherapist acted as a trainer for a local soccer club that was hosting a tournament. When a player dislocated a hip, the insured physiotherapist treated the injured player, providing urgent care at the scene. A year later, the player claimed against the insured physiotherapist for failing to provide appropriate treatment.
A benefits consultant was retained by a manufacturing firm to calculate the long-term disability benefits due to an employee. The consultant mistakenly based his calculations on the employee’s prior year’s salary instead of his current income. As a result, the employee received a lesser amount of disability benefits than he expected and sued the manufacturing firm for loss of income. The manufacturing firm paid for the correct loss of income but pursued the consultant to reimburse its legal costs alleging the lawsuit was entirely the result of the consultant’s miscalculations.
A financial consultant was retained by a client to provide him with a quotation for a certain level of retirement income. Based on the quotation, the client elected to retire soon thereafter. When the client realized the monthly pension benefit he was receiving was less than the amount the consultant had quoted, he sued the consultant alleging the consultant omitted an adjustment in his calculations.
Failure to Provide Adequate Coverage
An insurance broker was mandated by his client to obtain an errors and omissions policy for his employees (nurses) who worked as case managers for insurance companies. Instead, the broker provided a policy which covered nursing services only. After coverage was denied by the insurer for a claim against one of the employees, the client commenced a lawsuit alleging the broker failed to provide the proper coverage.
An insurance broker obtained a commercial property package policy for a client, including blanket coverage for multiple locations. The client suffered a fire loss at one location that resulted in a financial loss that was greater than the insurance limits. After the loss, it was determined that the client had misunderstood the policy coverage and thought the limits provided were per location and not blanket coverage. The client issued a lawsuit alleging negligent misrepresentation and claimed damages for the shortfall.
Breach of Duty
An insurance broker obtained personal and vehicle information from the client for the purpose of obtaining a new auto policy. However, the broker failed to submit the application to the auto insurer and subsequently, a policy was never issued. After the client and his passengers were involved in a motor vehicle accident, the injured passengers sued the client, who then initiated a claim against the broker, alleging breach of duty in failing to obtain coverage.
Failure to Provide Adequate Coverage
An insurance broker obtained a commercial auto policy with cargo coverage for the client’s business operations. The client’s application indicated that 5 per cent of their business was from transporting alcohol. The client suffered a theft of one of his transport trucks and its contents, which were cases of alcohol. After the insurer denied the contents portion of the claim, the client commenced legal action alleging that the broker failed to provide adequate coverage and failed to properly assess the risk.
A paralegal was retained by the victim of a motor vehicle accident. Based on the paralegal’s recommendation, the client accepted an all-inclusive settlement from the automobile insurer. The client instituted a lawsuit against the paralegal for alleging negligent advice which caused him to accept an inadequate settlement, preventing him from receiving additional accident benefits.
Failure to Obtain Consent
A paralegal was retained by a driver charged with careless driving following a motor vehicle accident. The driver instituted a lawsuit against the paralegal for settling his claim with the motor vehicle insurance company without his consent, and for failing to apply for a non-earner benefit under the motor vehicle insurance policy prior to settlement.
Failure to Warn of Limitation Period
A paralegal advised a driver involved in a motor vehicle accident that he may be able to sue the at-fault party. When the driver attempted to do so, he was informed he was out of time. The driver instituted a lawsuit against the paralegal for failing to warn him of the limitation period.
A printer was retained to insert an advertisement into a magazine. The printer placed the advertisement upside-down which could only be read by inverting the magazine. As a result, the advertiser issued a demand letter to the printer seeking the printing and advertising costs it paid to the magazine.
A newspaper published an article regarding a municipal politician involved in a number of local scandals. The article made reference to the politician as being “infamous.” The politician instituted a Small Claims Court action against the newspaper alleging libel.
Breach of Copyright
A publishing company used images from a popular children’s storybook in its own publication. Upon discovering this fact, the publisher of the original children’s storybook sought compensation from the publishing company for breach of copyright laws.
Failure to Perform Background Check
A human resources consultant was retained by a large company to screen potential candidates for a senior managerial position. The company dismissed the chosen candidate after less than a year and was sued for wrongful termination. The company in turn commenced a third party claim against the human resources consultant, alleging that he had failed to conduct a thorough background check on the candidate.
An appraiser was retained by a property insurer to assess the value of a private dwelling. The house was destroyed in a fire and was discovered to be significantly underinsured, leading to a claim against the broker and the appraiser for the loss.
Failure to Identify Commercial Use
An appraiser was retained by a property insurer to assess the risk of a residence with an attached garage. When the property was destroyed in a fire, coverage was denied to the owners of the property for failure to disclose its commercial usage. The owners sued the property insurer who in turn sued the appraiser for failing to properly identify the commercial use of the property.
An immigration consultant was retained to file an application for permanent residency. The application was never received by Citizenship and Immigration Canada (CIC). The client commenced a claim against the immigration consultant, alleging he was negligent in his handling of the application.
Loss of Income
An immigration consultant filed an online work permit extension on behalf of a client but failed to submit additional documentation within the specified time frame. As a result, the client’s work permit was not extended and the client was forced to apply for the restoration of his work status. During the lengthy restoration process, the client was not permitted to work, resulting in a claim for loss of income against the immigration consultant.
Failure to Verify
A cosmetic company retained a chemist to provide a formula for lipstick. The chemist prepared the formula without verifying it, and provided it to the cosmetic company to begin production. The cosmetic company later sued the chemist alleging that the formula did not produce the desired lipstick product rendering it unmarketable.