Errors and Omissions Insurance: Professional Liability Insurance Explained

Photo Courtesy: sturti/Getty Images

When a professional serves as a trusted adviser, mistakes come at a huge cost. Suppose a lawyer accidentally prepares the deed for the wrong piece of property, or an investment broker purchases 10,000 shares of a stock for a client instead of the 1,000 that was ordered — what are you supposed to do moving forward? 

In these situations, clients often sue professionals in civil court. Regardless of the court's decision, the cost of hiring an attorney and going to trial is often one that many professionals cannot afford. To protect themselves from this cost, professionals pay for errors and omissions insurance, which is more commonly known as professional liability insurance. Here's everything you need to know about this kind of coverage.