Professional liability insurance, often called Errors & Omissions (E&O), is frequently misunderstood as only relevant to doctors and lawyers. In practice, a much wider range of businesses face this exposure.

What E&O Actually Covers

E&O responds to claims that your professional service, advice, or deliverable caused a client financial harm — even without a clear-cut mistake. This is distinct from general liability, which covers physical injury or property damage.

Who Typically Needs It

  • Consultants, accountants, and financial advisors
  • IT service providers, software developers, and web designers
  • Insurance agents and real estate professionals
  • Marketing agencies and PR firms
  • Any business whose deliverable is advice, a service outcome, or a professional recommendation rather than a physical product

Common Triggers for a Claim

Claims often arise from missed deadlines, disputed scope of work, alleged negligent advice, or a client's dissatisfaction with outcomes — regardless of whether a court would ultimately find fault. Legal defense costs alone can be substantial even for claims that are eventually dismissed.

How It's Different From General Liability

General liability responds to bodily injury or property damage claims (a client trips in your office). E&O responds to financial harm claims tied to your professional work (your advice led to a costly business decision). Many businesses need both.

Contract Requirements

Increasingly, clients — especially larger companies and government contracts — require proof of E&O coverage with specific minimum limits before signing an agreement.

Whether you need E&O, and at what limit, depends on your specific service offering and client base. This is a starting point for evaluating your exposure — a licensed commercial insurance agent can assess your specific situation.