Errors and Omissions (E&O) insurance serves as a critical shield when a client alleges that your professional services caused them financial harm. It covers legal defense costs, settlements, and judgments, ensuring that a single mistake doesn’t jeopardize your career or finances. Here’s how it works in practice:For Notaries: If a notary overlooks a procedural step, like failing to record a notarization in their journal, and the client suffers a financial loss (e.g., a rejected mortgage application), E&O insurance covers legal fees and damages. For Lawyers: If an attorney provides incorrect advice on a tax filing, resulting in penalties for the client, E&O insurance pays for defense costs and any settlement, protecting the lawyer from out-of-pocket expenses. For Legal Advisors: If a financial advisor misinterprets a contract term, causing a client to lose a business deal, E&O insurance covers the resulting claim, safeguarding the advisor’s assets. Unlike notary bonds, which protect the public and require repayment if a claim is paid, E&O insurance protects you and does not need to be repaid after a claim. Most policies have no deductibles, meaning coverage kicks in immediately without upfront costs. Policies can also be tailored to cover prior acts (retroactive coverage) for eligible professionals, ensuring comprehensive protection.