Errors and Omissions Insurance
Professional liability insurance that protects businesses against claims of inadequate work or negligent actions
Detailed Explanation
Also known as professional liability insurance, E&O coverage is crucial for service providers, protecting them when clients claim financial harm due to mistakes, oversights, or failure to deliver promised services.
Practical Example
An accountant made an error on a client's tax return that resulted in penalties for the client. The accountant's E&O insurance covered the penalties and legal costs when the client sued for negligence.
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