Errors and Omissions (E&O) insurance, also known as professional liability insurance, is a type of insurance coverage that provides protection against claims that arise from mistakes, errors, or omissions made by a professional in the course of their work. It is typically purchased by professionals who provide services or advice to clients, such as lawyers, accountants, real estate agents, consultants, and insurance agents.

E&O insurance provides coverage for legal defense costs, settlements, and judgments that may arise from claims alleging negligence, errors, or omissions.

These claims can arise from a variety of scenarios, such as:

1. A client claiming that a professional provided incorrect advice or recommendations.

2. A client claimed that a professional failed to deliver services as promised.

3. A client claiming that a professional made a mistake or error that resulted in financial harm.

The coverage provided by an E&O policy can vary depending on the specific policy and the type of profession. In general, E&O policies cover the costs associated with legal defense, settlements, and judgments, up to the policy limit. Some policies may also cover other costs, such as court fees and expert witness fees.

It's important to note that E&O insurance is typically not included in general liability insurance policies, which provide coverage for bodily injury and property damage. E&O insurance is a separate type of insurance that is specifically designed to address the unique risks and liabilities faced by professionals who provide advice or services to clients.

If you are a professional who provides services or advice to clients, E&O insurance can provide valuable protection against the financial risk of claims alleging negligence, errors, or omissions. It's important to carefully review your insurance options and choose a policy that provides the right level of coverage for your specific profession and business needs.