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 Pennsylvania (PA), Errors and Omissions (E&O) insurance is a type of professional liability insurance that safeguards businesses and their employees from claims of negligence or substandard work by clients or customers. This insurance is crucial for professionals who provide services or advice, as it covers legal costs and settlements if a lawsuit alleges that a mistake or omission occurred during the provision of professional services. While E&O insurance is not mandated by Pennsylvania state law for all service providers, certain professions may be required to carry it by their industry regulations or licensing boards. For instance, real estate agents, appraisers, and architects often must have E&O insurance to practice. The coverage is particularly relevant for industries such as architecture, engineering, IT, real estate, consulting, marketing, and health and beauty, among others. It is designed to protect against claims even if no actual error was made, ensuring that professionals can defend themselves against allegations of negligence or failure to perform their duties as expected.