E&O insurance is also applicable to businesses outside the financial industry including nonprofits, general maintenance companies and contractors, and engineering firms. Any other company or professional who provides a service, such as wedding planners and printers, also needs E&O insurance. Doctors, dentists, and other medical professionals also take out E&O insurance called malpractice insurance.

Specifically, errors and omissions insurance covers a variety of legal claims against you, including:

• Negligence
• Misrepresentation
• Violation of good faith and fair dealing
• Inaccurate advice

If a customer sues you on these grounds, your errors and omissions policy will pay for:

• Your lawyer’s hourly fees
• Costs for hiring expert witnesses
• Administrative costs for handling case files
• Court expenses
• Costs incurred when you agree to settle a lawsuit
• Costs of paying for a legal judgment rendered by a judge or jury (penalties and fines)

Errors and omissions insurance does not cover deliberately misleading, wrongful, or illegal acts, mistakes you make in managing your business, or employment-related disputes.