What is the difference between errors and omissions and professional indemnity insurance?
Errors and omissions insurance and professional indemnity insurance are different names for the same type of insurance. It’s an insurance that protects your business from the cost of compensation claims when a client believes you’ve been negligent or made a mistake in your work.
There’s not really a difference between errors and omissions insurance and professional indemnity insurance - they generally cover similar risks (although exact coverage and exclusions will vary from policy to policy).
The difference is really just in the language: you’re more likely to come across the name ‘errors and omissions insurance’ (E&O) in the USA and ‘professional indemnity insurance’ (PI) in the UK.
However you refer to this insurance, it should cover legal fees and compensation costs if your business is sued by a client for being negligent or making a mistake that causes them financial loss.
This means professional indemnity insurance (or errors and omissions insurance) is a particularly important cover for businesses that offer advice or provide a professional service, from accountants to architects.