Q:

What is E&O insurance?

A:

Quick Answer

Errors and omissions insurance is a professional liability insurance product that safeguards organizations and individuals from client claims for negligence or incompetent performance. This type of insurance typically provides coverage for settlements and court expenses up to the amount specified in the insurance contract.

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Full Answer

Professionals in several industries, such as finance and investment consultancy, may purchase E&O insurance to protect themselves from lawsuit expenses. For these professionals, E&O insurance prevents excessive out-of-pocket expenses resulting from high legal fees. If a professional or corporation has a history of litigation issues, the cost of E&O insurance is higher and generally more restrictive.

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