Errors and omissions insurance—also known as E&O insurance, indemnity insurance, or professional liability insurance—is a form of professional liability insurance designed to protect employers and employees against customers’ or clients’ claims of negligence or inadequate work. It protects your business if you are sued for negligently performing your services—even if you didn’t make a mistake or do anything wrong.

A customer could sue you because you did something you shouldn’t have, or you didn’t do something you should have, in the course of providing professional services.

For example, a freelance writer or consultant who creates marketing and information content for websites might be sued by a client who is sued for copyright infringement or forced to remove the content from their website because it infringes another person’s copyright. An E&O policy might protect the freelance writer or consultant from the claim they were negligent in creating the content that infringes another person’s copyright—paying the cost of defending the case and any settlement or court judgment in the matter, subject to policy limits.

Industries with service providers who often purchase E&O insurance include:

• Architecture and engineering

• Construction

• IT/technology

• Real estate (agents, inspectors, surveyors, appraisers)

• Consulting

• Marketing (graphic designers, web designers, photographers, event planners, promoters)

• Health and beauty

• Fitness (instructors, teachers, trainers)

• Retail

• Therapy

In Arizona, Errors and Omissions (E&O) insurance is a type of professional liability insurance that safeguards businesses and professionals against claims of negligence or substandard work by clients or customers. This insurance is crucial for professionals who provide services or advice, as it covers legal defense costs and any settlements or judgments, up to the policy limits, if they are sued for making a mistake or failing to perform their professional duties, even if no actual error was made. E&O insurance is commonly purchased by various service providers including those in architecture, engineering, construction, IT, real estate, consulting, marketing, health and beauty, fitness, retail, and therapy. In Arizona, as in other states, the specific regulations and requirements for E&O insurance can vary based on the industry and the type of services provided. It is not mandated by state law for all service providers, but certain professionals, such as real estate agents and brokers, may be required to carry this insurance as part of their licensing requirements. It's advisable for professionals to consult with an attorney to understand the specific E&O insurance requirements and to ensure adequate coverage for their practice.