E and O insurance stands for errors and omissions and refers to coverage for mistakes that professionals may make in the everyday execution of their duties. Here is an explanation of what this type of policy covers and why everyone needs it.
What Errors and Omissions Insurance Covers
Errors and omissions is another term for professional liability insurance. It protects individuals from financial responsibilities that may arise from simple mistakes. For example, if a financial advisor gives advice that causes a client to lose money, errors and omissions insurance would cover potential litigation. Some policies even cover future work or that done in the past.
Who It Covers
When Americans go to work each day, they represent hundreds of different industries. With so many different responsibilities and job duties, it would be impossible to offer a one-size-fits-all policy to all of them. Therefore, insurance companies tailor coverage for each specific profession. Depending on the firm, some policies may or may not cover independent contractors.
No matter what profession you are in, professional liability insurance is extremely important. Everyone makes mistakes, and you should not risk losing your business or your credibility due to a simple error or omission. Your insurance agent can help guide you to a policy customized to the work you do every day.