Professional liability (E&O) insurance
If you give advice or deliver a professional service, general liability isn't enough. Here's what E&O protects.
Professional liability insurance — also called errors & omissions (E&O) — protects businesses that provide advice or professional services from claims that their work caused a client financial harm. It covers a gap that general liability doesn't.
What it covers
- Mistakes or errors in your professional work.
- Failure to deliver a service as promised, or missed deadlines.
- Negligence claims (even unfounded ones — legal defense is covered).
- Misrepresentation or bad advice.
E&O vs. general liability
General liability covers physical risks — bodily injury and property damage (a client slips in your office). E&O covers financial harm from your professional work or advice (your error costs a client money). Many service businesses need both.
Who needs it
Consultants, accountants, marketing and IT firms, real estate agents, financial advisors, contractors, and many other service providers. Clients often contractually require it before they'll hire you. Even a baseless lawsuit can cost thousands to defend — which is the core value of E&O.
Frequently asked questions
Claims that your professional work, advice, or services caused a client financial harm — including mistakes, missed deadlines, negligence, and the cost of defending against such claims (even when you did nothing wrong).
General liability covers bodily injury and property damage (physical risks). E&O covers financial harm from your professional services or advice. Service businesses often need both.
Anyone who provides advice or professional services — consultants, agencies, IT and financial professionals, real estate agents and more. Clients frequently require it in contracts.
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