Errors and omissions (E&O) insurance is professional liability coverage that protects advisors, agents, and firms against claims alleging negligence, inadequate advice, or administrative mistakes. Policies cover defense costs and settlements, subject to limits and exclusions such as fraud. Carriers and broker-dealers typically require active E&O to submit business. Coverage terms address retroactive dates, claim-made triggers, and endorsements for specific lines. Maintaining E&O is a baseline risk-management practice that helps professionals absorb legal expenses and preserve operations after client disputes or documentation failures.

Agencies require proof of E&O before contracting, and advisors maintain active coverage to submit applications. If a client alleges unsuitable advice or paperwork errors, E&O funds defense and potential settlements. Annual policy reviews check retroactive dates and limits, especially when expanding into variable products or advanced designs. E&O certificates are kept on file with carriers and broker-dealers.