Errors and omissions insurance (E &O) is a type of professional liability insurance that helps protect businesses and professionals if a client says a mistake, omission, or bad piece of advice caused them financial harm.

Quick Scoop

E&O insurance is often used by people who provide services or advice, such as consultants, real estate agents, brokers, and inspectors. It can help pay for legal defense costs, settlements, or judgments if someone sues over alleged negligence, inaccurate advice, missed deadlines, or failure to deliver a service.

What it usually covers

  • Claims of negligence or professional mistakes.
  • Inaccurate advice or misrepresentation.
  • Legal fees, court costs, settlements, and judgments.
  • Some policies may also cover past services and work done through employees or contractors.

What it does not cover

E&O insurance generally does not cover intentional wrongdoing, fraud, or criminal acts. It is meant for unintentional professional errors , not deliberate misconduct.

Simple example

If a consultant gives advice that causes a client to lose money and the client sues, E&O insurance may help cover the defense and any settlement costs.

Who may need it

Businesses that sell expertise or services are the main candidates, especially if their work affects clients’ finances or operations. Common examples include consultants, accountants, agents, IT service providers, and inspectors.

If you want, I can also give you a plain-English example of E &O vs general liability insurance.