Glossary
Errors and omissions (E&O)
Errors and omissions (E&O) insurance is professional liability coverage for insurance agencies and other professional firms. For an agency, it responds when a client claims the agency's mistake caused a financial loss: coverage that was never placed, limits that were too low, or a change that was requested but never processed.
Where agency E&O claims come from
The classic triggers are failure to procure coverage the client asked for, failure to offer or recommend coverage a reasonable agent would have raised, and administrative slips: a missed renewal, an unprocessed change request, wrong information keyed into an application.
The nasty part is timing. The error often surfaces only when an uncovered loss hits, which can be years after the mistake was made. By then the file is the only witness.
The best defense is a paper trail
Standard E&O hygiene is documenting what was offered, what was declined, and when. A signed rejection when a client turns down a recommended coverage, activity notes in the management system, and confirmations for every change request.
Re-keying between systems is where errors breed. Every time a limit or a VIN is typed twice, there is a chance it is typed differently, and a transposed number on an application is exactly the kind of mistake that becomes an E&O claim after a loss.
Common questions
Does E&O cover intentional acts?
No. Fraud and intentional wrongdoing are excluded. E&O responds to negligence and honest mistakes made in the course of professional work.
Do insurance agencies have to carry E&O?
Many carriers require proof of E&O as a condition of appointment, and some states require it for licensing. Check your carrier agreements and your state's producer licensing rules.
Part of the Relay insurance operations glossary. Updated 2026-07-11. See how we source content.
Get started
Get on the Summer ’26 list.
Spring ’26 is full. Get on the Summer ’26 list and we will be in touch as spots open.