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What’s the Difference Between Professional Liability and E&O Insurance?

Understanding the difference between professional liability insurance and E&O insurance.


As a business owner, you may be looking into your insurance options. As such, you may have come across the terms ‘professional liability insurance’ and ‘errors and omissions insurance’. To the untrained eye, these two policies can appear to be different coverages. If you aren’t sure what these terms mean for your business, we’re here to help!


Professional liability vs. errors and omissions insurance

You may be aware that many industries use the terms “E&O insurance” and “professional liability insurance” interchangeably.


Professional liability insurance is a term used to describe the policy covering consultants, engineers, accountants, and architects.


E&O insurance is used to describe the policy covering the real estate, technology sectors.


What does it cover?

On a basic level, professional liability insurance covers you when you are accused of not having done your job correctly. Businesses that provide professional services typically need professional liability insurance because those services come with risks. A client could hold your business liable for:

  • Breach of contract
  • Work oversights and errors
  • Providing substandard work
  • Missed deadlines
  • Negligence


If these professional mistakes result in financial losses for your client, they could sue you to recoup the expenses. In this case, professional liability/E&O insurance could help to cover:

  • Attorney fees
  • Court costs
  • Settlements or judgments


Keep in mind that even if you did nothing wrong and the claim against you was unjustified, there can still be huge costs associated with these types of claims.


We’re all human – we make mistakes sometimes. With professional liability insurance, it’s possible to prepare your business in advance. Get started on your tailored commercial insurance coverage by contacting the expert insurance agency in Fresno, McCarty Insurance. We provide reliable business insurance to suit all of your company’s needs so that you can feel rest assured your investment is protected.

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