Final answer:
Errors and omissions insurance is a type of liability insurance that provides protection to professionals against claims of negligent acts, errors, or omissions in their services. It helps cover legal fees, settlements, and judgments.
Step-by-step explanation:
Errors and omissions insurance is a type of liability insurance that protects professionals, like doctors, lawyers, and architects, from claims made by clients for negligent acts, errors, or omissions in their professional services. This insurance helps cover the costs of legal fees, settlements, and judgments that may arise from these claims.For example, if a doctor makes an error during surgery and the patient suffers harm as a result, the patient may file a lawsuit. Errors and omissions insurance can help the doctor cover the costs associated with defending the lawsuit and any potential damages awarded to the patient.It is important to note that errors and omissions insurance typically does not cover intentional wrongdoing or criminal acts. Each policy may have different coverage limits and exclusions, so it is important for professionals to carefully review their policy to understand what is covered and what is not.