Professional liability insurance, also known as errors and omissions insurance (E&O insurance) to some industries, is a line of insurance that protects your business against damages arising from the rendering of or failure to render professional services.
For example, if you own a design company and hire a subcontractor to prime interior walls prior to the application of a finish, and the product used results in damage to the integrity of the drywall - your business may be held liable for negligence.
You need professional liability insurance if:
Your organization provides advisory services or sells expertise
Your organization delivers accounting, medical, legal, engineering or other professional services
Your organization’s advisory services have the potential to cause a financial loss to a client due to errors in advice
Your organization professional services have the potential to cause financial loss and bodily injury due to malpractice
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