Home » Do I Need E&O Insurance?
December 5, 2023
Debonie Thompson

Do I Need E&O Insurance?

There are a ton of logistics to sort out when you first get a business started. Part of what you have to figure out is how to best protect your business. Insurance can help, but with so many different types of insurance out there, it can be tough to tell what is really necessary for your business. Do you need errors and omissions (E&O) insurance?

What Is E&O Insurance?

Mistakes are a normal part of doing business. No one wants to make them or deal with them, but they still happen. Sometimes those mistakes have such little impact that they go unnoticed. Other mistakes can have a dramatic impact and may even result in lawsuits. That’s where E&O insurance comes into play. It protects your business financially from covered lawsuits stemming from alleged or actual errors.

Who Needs It?

E&O insurance is primarily intended for those who provide advice to others. Those seeking advice rely on what they’re told to get positive outcomes. When that doesn’t happen, they may seek financial compensation via a lawsuit. Professionals such as lawyers, appraisers, trustees, insurance agents, real estate agents, brokers, investment advisors, and financial planners all primarily earn their money by giving advice. As such, they should have E&O insurance to ensure they’re covered if they’re sued for giving erroneous advice or omitting critical information.

What Does It Cover?

What counts as a covered lawsuit will depend on your policy and your profession. Generally speaking, however, it covers claims based on mistakes, negligence, misrepresentation, inaccuracies, inadequate work, and other similar problems. Inadequate communication or documentation and breach of duty are also common causes of E&O claims. It doesn’t cover intentional deception, breaking the law, or other purposeful wrongdoing.


Those in the technology industry may also benefit from a solid E&O insurance policy. This can help cover lawsuits resulting from data breaches, breaches of contract or warranty, fraud, negligence, or misrepresentation.


Figuring out what sort of insurance coverage is right for your business can be a little tricky. Once you have that worked out, you can start determining how much coverage you need. From there it’s a matter of finding the right provider and policy. Shop around so you know you’re getting what you need from your E&O insurance and any other insurance policies you decide you need for your business.

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