Professional liability insurance, also known as errors and omissions insurance (E&O), is a type of insurance that provides protection to professionals from financial loss resulting from lawsuits or claims made by clients or customers alleging negligence, errors, or omissions in the performance of their professional services.
Professional liability insurance is typically purchased by individuals or businesses that provide professional services or advice, such as lawyers, doctors, accountants, architects, engineers, and consultants. It can provide coverage for a wide range of professional liabilities, including:
- Professional negligence or errors: when a client claims that a professional provided incorrect or inadequate advice or services, resulting in financial harm.
- Misrepresentation or breach of contract: when a professional fails to fulfill the terms of a contract or misrepresents their services or abilities, resulting in financial harm to the client.
- Intellectual property infringement: when a professional is accused of using copyrighted material, trademarks, or trade secrets without permission.
- Data breaches: when a professional is accused of mishandling or losing confidential client data.
Professional liability insurance policies may vary depending on the profession and the specific risks involved, but typically cover legal fees and damages associated with claims or lawsuits made against the insured professional. It is important to review the policy carefully and work with a licensed insurance agent or broker to ensure that you have adequate coverage for your specific professional liabilities.