What does it cover?
Errors & omissions (E&O) insurance – also called professional liability – can protect professionals from defense costs and damages stemming from lawsuits related to their services. Even frivolous lawsuits can be costly to defend and settle, and you need quick access to experienced and affordable defense counsel to help get them resolved efficiently and favorably.
Is it mandatory?
While E&O coverage is usually not mandatory for most professionals, it is required to obtain certain financial services licenses and may be contractually required by your clients or vendors. Even absent any such requirements, it is still a good idea to carry some limit of coverage if you are providing a service to others.