What does the term "Errors and Omissions" refer to in professional liability insurance?

The term "Errors and Omissions" in professional liability insurance refers specifically to negligent acts or omissions. This type of insurance is designed to protect professionals, such as doctors, lawyers, and accountants, from claims arising due to mistakes or failures to perform their professional duties. When a professional provides services, there is an expectation of a certain level of care and competency. If they fail to meet that standard, resulting in a financial loss for a client, this could be considered an error or omission.

For example, if an accountant overlooks a critical detail while preparing taxes, leading to financial penalties for their client, this situation would be addressed under an Errors and Omissions policy. This insurance helps cover legal defense costs, settlements, and judgments that may arise from such claims, underscoring its importance in protecting professionals from the implications of unintentional errors in their work.

Other options, such as deliberate misconduct, property damage, and physical injury, do not accurately capture the essence of Errors and Omissions insurance, which focuses solely on unintentional mistakes or failures, not intentional wrongdoing or other types of liability.