Errors And Omissions Insurance
What Does Errors And Omissions Insurance Mean?
Errors and omissions (E&O) insurance is a type of liability insurance designed to protect businesses against losses arising from mistakes or negligence in their professional services. Such losses typically result from client lawsuits. E&O insurance generally covers both the primary financial losses and associated court costs.
Insuranceopedia Explains Errors And Omissions Insurance
Even top-performing companies can sometimes make mistakes. For instance, a train manufacturer might inadvertently use a defective part in an engine, causing a train breakdown and resulting in financial losses for the client. The client could then file a lawsuit against the manufacturer. Errors and omissions (E&O) insurance would cover such losses, helping to mitigate the financial impact. E&O insurance is just one of many types of commercial insurance businesses can purchase to manage their risk exposures.
