What type of liability insurance protects professionals from errors that harm clients?

• A. General Liability
• B. Product Liability
• C. Errors and Omissions
• D. Professional Indemnity

Answer: (C)

Errors and omissions insurance, also known as E&O insurance, is specifically designed to protect professionals from liability arising from mistakes or negligence in the services they provide to clients. This type of coverage is particularly important for professionals like attorneys, accountants, consultants, and healthcare providers, as it addresses claims resulting from oversights, misjudgments, or failure to perform professional duties according to accepted standards.

When a professional is accused of making an error that negatively impacts a client’s finances or results in a loss, errors and omissions insurance can help cover the legal costs associated with defending against the claim, as well as any settlements or judgments that may arise. This insurance provides peace of mind and financial protection for professionals who rely on their expertise and make decisions that can significantly affect their clients' outcomes.

Understanding that general liability insurance is more focused on bodily injury and property damage claims, product liability insurance pertains to damages caused by a product's defects, and professional indemnity, while similar, typically refers to specific classes of professionals and may not be as universally recognized, helps to clarify why errors and omissions is the most appropriate choice in this context.