Errors & Omissions (E&O) Insurance is a popular alternative name for Professional Liability Insurance, but the latter is the official name in the insurance industry. Regardless of what you call the policy, it is recommended for protecting any consulting practice because It provides protection from errors and missed deadlines (due to negligence) that lead to a financial loss for clients.
Errors and Omissions policies don’t cover damages to third parties from cybersecurity breaches. If you store electronic data related to clients, whether personal or financial, it may be a good idea to ensure that your Consultant Insurance policy includes coverage for cyber liability because you may be held liable for third-party damages caused by cyber attacks on your servers.
Although Consultant Insurance is not mandatory by law, it may be important to protect your business with a consultant insurance policy because clients have the legal right to file claims for mistakes caused by the negligence of consultants and independent contractors. Most clients will require you to have Consultant Insurance before hiring you because small mistakes on your part could lead to huge financial losses for them.