What does errors and omissions insurance cover?

Errors and omissions insurance primarily covers claims arising from professional mistakes or negligence. This type of insurance is designed for professionals such as consultants, real estate agents, and healthcare providers who may face lawsuits from clients claiming inadequate service or failure to perform their professional duties correctly. For example, if a client alleges that a consultant did not deliver promised results or that a lawyer overlooked a critical deadline, errors and omissions insurance would help defend against these claims and cover associated legal costs and damages.

In contrast, other options focus on different areas of liability or losses. Liability claims generally cover judgments against an insured party for causing bodily injury or property damage, which is not the focus of errors and omissions insurance. Employee theft pertains to fidelity or crime insurance rather than errors and omissions coverage. Additionally, property damage resulting from products sold typically falls under product liability insurance, which addresses risks associated with physical harm caused by a product rather than professional negligence.