Professional liability (E&O)
Coverage for financial harm from mistakes or failure to perform professional services.
Plain definition
Professional liability—errors and omissions (E&O)—covers claims that your professional advice or service caused a client financial loss, not bodily injury from a hammer slip (which may be general liability). Architects, consultants, agents, and tech firms commonly carry E&O alongside GL.
Why it matters
Clients sue for missed deadlines, bad designs, or data errors. Without E&O, defense costs come from business cash even when you did nothing wrong.
Example
A client alleges your tax preparer missed a deduction causing IRS penalties. E&O may defend and pay covered settlements within limits.
Common misunderstanding
General liability’s “professional services” exclusion pushes many service errors to E&O, not GL.
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