Errors & omissions insurance, a type of business liability insurance, is frequently called E&O , professional liability insurance, or malpractice insurance.
E&O insurance is not generally included in general business liability insurance, so you will want to seek it out if your business is one that might need it.
Lawyers, architects, web developers, real estate agents — anyone whose work might cause financial harm to another business or person via a mistake or something left out — would want to look into E&O.
Legal costs associated with many lawsuits can cripple or even kill a company, and E&O insurance is meant to protect against that and large awards by the court.
Anyone can bring a lawsuit at any time against anyone in America. There is no “pretrial” procedure where the plaintiff has to prove that there is sufficient evidence to continue with a suit. And proving that you were not negligent can still cost immense amounts of money. Errors & omissions insurance will also cover you in such a situation.
Errors & omissions insurance covers court costs, judgements, settlements, and other legal expenses which are incurred by you and your business for any faulty advice or professional services your company may provide.
As we are fond of reminding you, each business — each situation — is different, and we urge you to discuss this with your licensed insurance professional to see how best to protect yourself. Ask questions and make sure you know not only what is covered, but any exclusions in the policy.