errors and omissions insurance

Errors and Omissions Insurance is a plan obtained by an individual or company to protect them from clients who might claim a mistake of some sort in their work. If a person or company with E & O insurance is sued, the policy will provide coverage against the costs of court and actual settlements. Primarily, E & O insurance is used in companies where the many financial transactions make it easy for errors to take place, such as insurance, real estate, or financial planning. In these industries, lawsuits are common because the professionals make financial decisions on behalf of others. For example, a client who was advised to invest only to lose all of their money might sue, especially if they have cause to believe the investor advised them wrongly. So whether or not the lawsuit actually ends badly, the E & O insurance covers the required court fees and the risk of a costly settlement.

Fast Facts

E&O insurance is similar to a doctor's malpractice insurance

errors and omissions insurance - Financial Planners, Articles and Q&A

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