What type of insurance is also referred to as professional liability insurance?

Errors and omissions insurance is often referred to as professional liability insurance because it provides coverage for professionals against claims of inadequate work or negligent actions. This type of insurance is crucial for those in professions where the service provided may lead to financial losses for clients due to errors, omissions, or negligence. Such professionals may include consultants, brokers, and other service providers.

The main purpose of errors and omissions insurance is to protect professionals from the financial repercussions of lawsuits and claims made by clients asserting that they have suffered harm due to the professional's actions or lack of actions. By having this insurance, professionals can mitigate risks associated with their services, ensuring that they can defend themselves against potential claims without facing devastating financial consequences.

In contrast, general liability insurance primarily covers bodily injury and property damage claims, while umbrella insurance provides additional coverage beyond standard policies. Business interruption insurance is designed to cover lost income during a period of suspended business operations due to a covered event. Therefore, errors and omissions insurance uniquely addresses the risks specific to professional services, justifying its identification as professional liability insurance.