What does Professional Liability coverage protect the insured against?

Professional Liability coverage, often referred to as Errors and Omissions (E&O) insurance, is specifically designed to protect professionals from claims arising out of their professional services. This type of coverage addresses the risks associated with mistakes, negligence, or failure to perform professional duties that lead to financial loss for a client.

When a professional provides advice, services, or solutions to a client, there is always a risk that something could go wrong, either due to an error in judgment or failure to deliver services as expected. If a client believes that the professional’s actions resulted in a financial loss, they can file a lawsuit. Professional Liability coverage steps in to protect the insured by covering legal defense costs and any settlements or judgments arising from such claims.

In contrast, the other options describe different types of coverage not encompassed by Professional Liability. Property damage pertains to damage to physical property, insurance fraud involves dishonest acts relating to insurance claims, and personal injury typically addresses harm to an individual's reputation or emotional distress rather than mistakes made in a professional context. Thus, Professional Liability specifically focuses on errors and omissions, making it the correct answer.