Errors and Omissions (E&O) Insurance
Errors and Omissions (E&O) Insurance is a type of professional Liability insurance that protects professionals and businesses from claims of negligence, errors, or omissions that occur while providing their services. This insurance covers legal costs and damages arising from allegations of inadequate work or failure to deliver promised services.
Examples of professions that commonly require E&O insurance include:
- Consultants: A management consultant might be sued for providing poor advice that leads to financial losses for a cLient.
- Accountants: An Accountant could face claims for mistakes in tax filings that result in penalties for their cLients.
- Real Estate Agents: A real estate agent might be liable if they fail to disclose critical information about a property, leading to a lawsuit from the buyer.
Cases illustrating the importance of E&O insurance:
- In a case involving a software developer, a cLient sued for failing to deliver a working application on time, which caused the cLient to miss critical business opportunities.
- A Financial Advisor faced legal action for not adequately disclosing risks associated with a particular investment, resulting in significant losses for their cLients.