Errors and omissions insurance—also known as E&O insurance, indemnity insurance, or professional liability insurance—is a form of professional liability insurance designed to protect employers and employees against customers’ or clients’ claims of negligence or inadequate work. It protects your business if you are sued for negligently performing your services—even if you didn’t make a mistake or do anything wrong.

A customer could sue you because you did something you shouldn’t have, or you didn’t do something you should have, in the course of providing professional services.

For example, a freelance writer or consultant who creates marketing and information content for websites might be sued by a client who is sued for copyright infringement or forced to remove the content from their website because it infringes another person’s copyright. An E&O policy might protect the freelance writer or consultant from the claim they were negligent in creating the content that infringes another person’s copyright—paying the cost of defending the case and any settlement or court judgment in the matter, subject to policy limits.

Industries with service providers who often purchase E&O insurance include:

• Architecture and engineering

• Construction

• IT/technology

• Real estate (agents, inspectors, surveyors, appraisers)

• Consulting

• Marketing (graphic designers, web designers, photographers, event planners, promoters)

• Health and beauty

• Fitness (instructors, teachers, trainers)

• Retail

• Therapy

In North Carolina (NC), Errors and Omissions (E&O) insurance is a type of professional liability insurance that safeguards businesses and professionals against claims of negligence or substandard work by clients or customers. This insurance is particularly relevant for service-oriented industries where the risk of being sued for negligence or errors in the provision of services is higher. E&O insurance covers legal defense costs, settlements, and judgments up to the policy limits. While not mandated by state law, certain professions may be required to carry this insurance either by industry standards, contractual obligations, or by specific regulatory bodies governing professions such as real estate agents, architects, engineers, and others. It's important for professionals in NC to consider E&O insurance as part of their risk management strategy to protect against potential claims that could arise from their professional activities.