When you are looking for the right contractors insurance for your business, you will have many choices, including whether to buy professional liability insurance, also known as “errors and omission” insurance or “E & O.”

E & O is a liability policy that protects you if you make a mistake that causes a financial loss to a client. Similar to general liability, it will provide legal defense and claims settlements, if necessary.

You may want or need this coverage under the following circumstances:

• You provide professional advice in your line of work. This can include everything from recommending a particular type of plumbing or wiring to providing interior design services.
• You hire employees or subcontractors who provide any sort of advice or consulting services.
• Your state requires you to have E & O insurance due to the work you perform.

If you utilize subcontractors, it is a good idea to make certain they are insured with professional liability as well, as they may not be covered by your policy.