Protection for professionals if a client claims your mistake, poor advice, or oversight caused them financial loss.
If you provide services, advice, or expertise to others, mistakes can happen — even when you’re careful. That’s where Errors and Omissions Liability, often called Professional Liability (non-medical) or simply E&O insurance, comes in. This type of insurance helps protect professionals when clients claim they suffered a loss because of an error, omission, or negligent act in the services provided.
In simple terms, Errors and Omissions Liability insurance is designed to cover the financial consequences of professional mistakes that lead to claims or lawsuits.
What Errors and Omissions Liability Really Covers
Errors and Omissions Liability focuses on problems related to how a service is performed, not physical accidents like slip-and-falls. It applies when someone claims they lost money or suffered harm because of:
-
Errors or mistakes in your work
-
Omissions, meaning something important was left out
-
Poor professional judgment or advice
-
Breaches of professional duty
-
Negligent or wrongful acts related to business conduct
For example, if a consultant gives incorrect advice that causes a client to lose money, or an IT professional fails to properly secure data, E&O insurance can help cover the legal costs and damages from that claim.
Who Typically Needs Errors and Omissions Liability Insurance?
Errors and Omissions Liability is common among professionals who offer expertise or specialized services. This includes:
-
Consultants and business advisors
-
Insurance agents and brokers
-
Real estate agents
-
Accountants and tax preparers
-
IT professionals and software developers
-
Marketing agencies
-
Architects and engineers (non-medical)
If your work requires clients to trust your professional judgment, E&O insurance is something you should seriously consider.
Real-Life Example of an E&O Claim
Imagine a marketing consultant who designs a campaign and promises certain results. Due to an oversight, an important compliance rule is missed, and the client ends up facing unexpected costs and lost revenue.
Even if the consultant didn’t mean to cause harm, the client might sue for damages. Errors and Omissions Liability insurance can help pay for legal defense, settlements, or court judgments related to that claim.
Without this coverage, those costs would usually come out of the professional’s own pocket.
What Errors and Omissions Liability Does NOT Cover
It’s important to understand that E&O insurance has limits. It typically does not cover:
-
Intentional wrongdoing or fraud
-
Criminal acts
-
Bodily injury or property damage unrelated to professional services
-
Medical malpractice (which requires a separate policy)
-
General workplace accidents (covered by general liability insurance)
This is why many businesses carry both general liability insurance and Errors and Omissions Liability insurance.
Why Errors and Omissions Liability Matters
Even the most experienced professionals can face angry clients or misunderstandings. A claim doesn’t necessarily mean you did something wrong — only that someone believes they were harmed.
Legal defense costs alone can be expensive. Errors and Omissions Liability insurance helps protect your finances, reputation, and business continuity when disputes arise over your professional services.
For many contracts, especially with larger clients, E&O coverage is often required before you can even start working.
Errors and Omissions vs. General Liability
A simple way to remember the difference:
-
General liability covers physical risks, like bodily injury or property damage.
-
Errors and omissions liability covers professional risks, like advice, decisions, and services that didn’t meet expectations.
They work best together, not as replacements for each other.
Final Thoughts
Errors and Omissions Liability (Professional Liability other than Medical) is essential protection for anyone whose work depends on professional skill and judgment. It helps safeguard your business from costly claims related to errors, omissions, or negligence — even when mistakes are unintentional.
If your income depends on providing services, advice, or expertise, E&O insurance isn’t just a safety net. It’s peace of mind.
Want to explore something else? Here’s another article you might enjoy:
