Professional liability insurance, also known as Errors and Omissions (E&O) insurance, is a specific coverage designed to protect professionals from allegations of mistakes or failures in their services. Unlike general liability insurance, which covers physical damage or bodily injury, professional liability insurance focuses on intangible risks related to your services.
For example, if a client accuses you of giving wrong advice that resulted in financial losses, or if a mistake in your work has unintended effects, this insurance will pay legal defense costs, settlements, and judgments.