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What is professional liability insurance (E&O)?

Professional liability insurance, also known as errors & omissions or professional indemnity insurance, protects against financial loss as a result of malpractice, errors and/or negligence.

 

The coverage focuses on the policyholder’s failure to perform part or all of the job, financial loss caused by the policyholder, and error or omission in the service provided by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm.

 

Coverage sometimes provides for the defense costs, including when legal action turns out to be groundless. Coverage does not include criminal prosecution, nor a wide range of potential liabilities under civil law if they are not specifically included in the policy.

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