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 Idaho, Errors and Omissions (E&O) insurance is a type of professional liability insurance that safeguards businesses and their employees from 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 a lawsuit arises alleging that the professional was negligent or made errors in their work. While E&O insurance is not mandated by Idaho state law for all service providers, certain professions may be required to carry it by their industry standards or regulatory bodies. For instance, real estate agents and appraisers often must have E&O insurance to be licensed. Professionals in fields such as architecture, engineering, IT, consulting, marketing, and health and beauty frequently obtain E&O insurance to mitigate the risks associated with their services. It's important for businesses in these industries to consider E&O coverage as part of their risk management strategy to protect against potential legal actions that could arise from their professional activities.