General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Errors and omissions (E&O) insurance protects an insurance agent by:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
E&O, or professional liability, insurance covers the agent for claims alleging errors, omissions, or negligent acts in the performance of professional duties — for example, failing to recommend needed coverage or misquoting a premium. It is a business risk management tool for producers. Policies typically exclude intentional wrongdoing, dishonest acts, and criminal conduct.
Why the other options are wrong
- B) The insured's medical bills are covered by the insured's own health or auto insurance, not by the agent's E&O coverage.
- C) Lost commissions from cancellations are a business expense, not a covered E&O loss.
- D) E&O insurance is liability coverage, not income protection or a salary guarantee.
Memory hook
E&O = malpractice coverage for agents. It pays when your professional slip-up costs a client.