Q:
What is Errors and Omissions insurance? Who offers it?
Answer:
Errors and Omissions insurance (also called "E and O") is one portion of a comprehensive professional liability insurance package. It protects business owners and professionals against liability claims or lawsuits for damage that is caused by errors (something they did) or omissions (something they failed to do). For example, if you are an accountant doing tax preparation work for a client and you mistakenly claim a deduction to which your client is not entitled, your client might sue you to recover the penalties imposed by the IRS (plus damages for the mental anguish caused by the audit). Errors and omissions insurance could protect you against such a lawsuit.
Errors and Omissions policies can be quite expensive, and are typically customized to meet the needs of a specific professional group. Professionals who purchase Errors and Omissions policies commonly include lawyers, accountants, engineers, bankers, employee benefit managers, architects, stockbrokers, insurance agents, travel agents, and other professionals who manage money and property for others.
Most states have several insurers who specialize in business insurance. These insurance companies generally sell Errors and Omissions policies, as well as other types professional and commercial liability insurance. Many professional and trade organizations also offer Errors and Omissions insurance, often with discounted rates.