Errors and omissions insurance protects business professionals whose clients could claim damages as a result of the business professional's faulty performance.

The faulty performance may be because of a neglient act, error, or omission by the professional; hence, the name of the insurance.

Errors and omissions insurance protects the business professional by shielding his or her assets and paying for his or her defense if a client makes a claim. It protects the professional's clients by ensuring that there will be adequate funds to pay for damages incurred if the professional's services are deemed to be faulty.