Function

• Errors and omissions (E&O) insurance policies defend professionals such as doctors, lawyers, accountants, educators, architects and engineers against claims of negligence or errors that result in economic damage to someone else. Bodily injury, personal injury and property damage are not protected by E&O because these are covered under a general liability policy.
  
  

History

• Insurance carriers originally designed E&O policies to safeguard professionals that needed formal training and licensing certification such as doctors and lawyers. Later, other types of professionals, known under the law as quasi-professionals, started seeking E&O protection, including real estate agents and computer technology specialists. Specific E&O policies now address the concerns of this new group of professionals.
  
  

Importance

• E&O is important because it addresses a deficiency in general liability policies. General liability insurance excludes coverage when a lawsuit results from a policyholder's failure to render professional services and specifically excludes lawsuits that allege strictly economic damages. An E&O policy will protect professional service company assets.