Errors & Omissions Insurance

The short answer is yes. Mistakes happen every day so every prudent professional should have errors and omissions insurance in place.
 
Even if you did nothing wrong, clients might initiate a lawsuit out of a simple misunderstanding causing you to spend thousands on legal fees before the whole thing is settled. These types of expenses can bankrupt a small business and can serious damage your reputation. An often overlooked benefit of having E&O insurance is that the insurer will be responsible for defending all claims made against you – even if their claims are later shown to be untrue.
 
Depending on what type of business you’re in, it might also be a legal requirement that you obtain E&O insurance before doing business. This requirement might be imposed by a regulatory body or by business partners.

Every professional is unique and every industry faces its own set of risk and challenges. In response to this, insurance companies have devised different E&O insurance products with coverages tailored that specific industry.
 

Errors and omissions claims can also have a long tail. You might have serviced a client and not have a claim pop up until a few years later. If you’re still in business, your current E&O insurance will step in to provide coverage. But if you’re going out of business or no longer keeping an active E&O policy, you have the option to purchase a special type of E&O insurance called run-off coverage. This protects you against liability for a certain period of time after your business closes.