Errors And Omissions Insurance - E&O
Definition of 'Errors And Omissions Insurance - E&O'A professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions. Errors and omissions insurance often covers both court costs and any settlements up to the amount specified on the insurance contract. |
|
Investopedia explains 'Errors And Omissions Insurance - E&O'E&O insurance can be obtained by insurance brokers/dealers, registered investment advisors and financial planners, among others. It is often required by regulatory bodies such as FINRA or company investors.In the financial industry, lawsuits will happen, regardless on how baseless the claims may be. Clients sometimes sue an advisor or broker after an investment goes sour, even if the risks were well known and within the guidelines established by the client. In these cases, even if a court or arbitration panel finds in favor of a broker or investment advisor, the legal fees can be very high and E&O insurance is vital in these situations. A person or company that has had numerous litigation problems has a higher underwriting risk and will find E&O insurance to be more expensive or less favorable in its terms as a result. |
Related Definitions
Articles Of Interest
-
Cover Your Company With Liability Insurance
Every business is susceptible to legal action. Find out how to protect yours. -
Don't Get Sued: 5 Tips To Protect Your Small Business
Find out what you can do to limit risk and keep your business running smoothly. -
Is Your Broker Ripping You Off?
We show you how to resolve a problem without getting the lawyers involved. -
Tips For Resolving Disputes With Your Financial Advisor
Before you blame your advisor for your losses, be sure you know your rights and responsibilities. -
When A Dispute With Your Broker Calls For Arbitration
Do you have a claim you'd like to file? We'll take you through this process step by step. -
Filling The Gaps In General Liability Insurance
Standard liability coverage may not be enough. Special needs call for specialized policies. -
How does FINRA differ from the SEC?
With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. The Securities and Exchange Commission (SEC) and the Financial Industry ... -
Financial Designations That Employers Require
We break down the designations that are important to have if you want to work in the financial sector. -
The Hidden Costs Of Wedding Insurance
Weddings don't always go smoothly. Here's how you can protect yourself from things backfiring. -
4 Natural Disasters Affecting The American Economy
2012 has already seen more than its fair share of significant natural disasters and the economy is suffering for it.