Professional liability insurance, also known as errors and omissions (E&O) insurance, protects professionals from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These policies are typically customized for a specific type of business or profession, and it's designed to cover financial losses and expenses resulting from claims of professional mistakes or negligence.