Errors and Omissions Insurance (E & O), also known as Professional Liability Insurance (PLI) offers certain protections against claims for damages against a business that are not included in the typical General Liability Insurance policy. Like General Liability Insurance, E & O Insurance applies to a wide variety of businesses, however, while General Liability Insurance covers bodily injury, property damage, personal injury or even advertising injury claims, E & O Insurance focuses on claims against professional firms or organizations that involve negligence, misrepresentation, violation of good faith and inaccurate advice.

Examples of businesses and professionals that commonly purchase Professional Liability or E & O Insurance are any individual, firm or organization that provides services such as giving advice, making recommendations or designing things. This includes professions such as accounting, engineering, financial services, brokerage firms, architecture, consulting services, equipment and software design, real estate and legal services. Some charities and other nonprofit organizations also carry Professional Liability or E & O Insurance.

A classic example of a business that benefits from Professional Liability or E & O Insurance would be accounting services. If an accountant fails to perform his job properly or commits “Errors and Omissions”, it may not cause physical or personal damage so the General Liability Insurance policy would not be triggered, however, it directly causes financial losses for which the accounting firm would likely be sued.