What is the purpose of errors and omissions insurance?

Errors and omissions insurance, commonly referred to as E&O insurance, serves the specific purpose of protecting professionals from claims that arise due to negligence, errors, or omissions that result from their services or advice. This type of insurance is particularly crucial in industries where professionals provide services that are critical to the operation and success of their clients.

For instance, professionals such as accountants, doctors, architects, and real estate agents can face claims stemming from allegations of inadequate work, failure to deliver services as promised, or negligent actions that lead to financial loss for clients. Errors and omissions insurance provides coverage against these types of claims, helping to safeguard the professional's reputation and financial stability.

The other options, while related to various forms of insurance, do not align with the primary purpose of E&O insurance. Coverage for physical injuries would typically fall under general liability insurance. Insuring products sold relates to product liability insurance, and providing coverage for corporate executives pertains to directors and officers (D&O) insurance. Each of these areas has its dedicated insurance solutions, unlike errors and omissions insurance, which is specifically aimed at issues arising from professional services and advice.