Which type of insurance is referred to as "errors and omissions" insurance?

"Errors and omissions" insurance, commonly referred to as E&O insurance, is specifically designed to protect professionals against claims of negligence, mistakes, or inadequate work done in the course of their professional duties. This type of insurance is essential for professionals like consultants, architects, engineers, and other service providers, as it covers the legal costs and any potential settlements arising from claims made by clients who believe they have suffered a financial loss due to the professional's actions or inaction.

The nature of professional services often involves a certain level of judgment, expertise, and trust, and clients may hold these professionals accountable for mistakes that lead to adverse outcomes. E&O insurance provides a safety net, ensuring that professionals can defend themselves against such claims without facing significant financial distress.

Understanding the context of this insurance is crucial for those in the insurance industry, as it underscores the importance of client trust and the potential liabilities professionals face.