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Apology Accepted

E&O insurance can help make up for mistakes.

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This story appears in the February 2007 issue of Entrepreneur. Subscribe »

Often, business mistakes can be handled with a sincere "I'm sorry" and perhaps an adjustment on the invoice. But what if you're a professional service provider and your mistake caused your client serious economic loss? To protect yourself from the cost of litigation and damages, you need errors and omissions (E&O) coverage.

"E&O, also called professional liability insurance, covers professionals for unintentional errors or omissions they make in the rendering of their professional services," says Mark S. Wolf, assistant vice president of E&O operations with Independent Insurance Agents and Brokers of America in Alexandria, Virginia. The coverage pays both defense costs and damage awards.

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