Professional Liability insurance (also known as errors and omissions, or E&O, insurance) helps pay for lawsuit costs and damages if your company is accused of work errors or incomplete projects that cause a client to lose money.
Professional liability can help pay for:
Professional negligence (actual or alleged)
Legal defense costs
Missed Deadline - Even if it's out of your control, a disruption in your supply chain or business operations might render you accountable if your customer doesn't get what they need on time. If the client decides to sue you, Professional Liability insurance will cover the costs of legal fees.
Failure to disclose - Professional Liability insurance covers your business if you fail to provide a customer sufficient instructions. The client may hold you liable for any financial losses they incur.
Unauthorized Trade - A claimant alleged that several unauthorized trades were processed from his accounts through the adviser totaling over $250,000. The claimant sought to have his accounts reinstated as if the unauthorized transactions did not occur. Additionally, the claimant sought the increase that his stocks would have earned during the rise in the market during that period. The claim settled out of court for over $200,000, this settlement would be covered by Professional Liability insurance.