E&O insurance is designed to protect businesses and professionals from financial losses resulting from mistakes, errors, or omissions in their work. Even a single mistake can lead to a costly lawsuit, and E&O insurance can help cover the expenses.

For instance, if you’re a consultant and you provide advice to a client that leads to financial losses, the client might sue you for damages. E&O insurance can help cover the cost of defending your business and paying damages if you’re found liable.

Similarly, if you’re a healthcare professional and you make a mistake in a patient’s treatment, E&O insurance can help protect you against medical malpractice claims.

The insurance typically covers:

– Legal fees and expenses
– Damages or settlements awarded to the claimant
– Other related costs

Having E&O insurance can give you peace of mind and protect your business from financial ruin in case of an unexpected mistake or error.