Doctors carry malpractice insurance in case a mistake hurts a patient. Errors and omissions (E&O) insurance is the producer's version: professional liability insurance for financial harm caused by a mistake in professional services.
What E&O commonly covers: claims that a producer's negligent act, error or omission harmed a client, such as forgetting to add a new building to the policy, failing to place requested coverage, or giving wrong advice.
What it commonly does not cover:
a customer slipping in the agency lobby (a general liability claim)
a fire that destroys the agency's own computers (a property claim)
deliberate dishonest acts, such as keeping a client's premium
How it applies: many E&O policies are written on a claims-made form, which looks at when the claim is made, not when the error happened. A producer needs a policy in force, or an extended reporting period, when the claim arrives. If she made an error in 2024, let the policy end in 2025 without an extended reporting period, and is first sued in 2026, the suit is not covered.
Why producers need it: a client's suit can surface years after the work was done, and without E&O the producer's own assets are exposed.