Errors and Omissions (Malpractice)

Errors & Omissions (E&O) is also called Professional Liability Insurance (PLI).  This type of policy is a form of liability insurance which helps protect professional advice and service providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, including damages awarded in such a civil lawsuit.

The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder.  These are potential causes for legal action that would not be covered by a more general liability insurance policy which would address more direct forms of harm.  Professional liability coverage may also provide for the defense costs, including if a legal action turns out to be groundless.

E&O insurance is required by law in some areas for certain kinds of professional practice, especially medical and legal.  It is also sometimes required under contract by other businesses that are the beneficiaries of the advice or service.