David Florrell started a public accounting firm.David is concerned that accountants on his staff may give incorrect accounting advice,and the accounting firm may be sued.What type of liability insurance should David purchase to protect against such claims?

Question

Quizplus · Accepted Answer

Errors and omissions insurance (E&O) is also known as professional liability insurance. This type of insurance protects businesses against claims arising from errors or omissions made by their employees during the course of their professional duties. As an accounting firm, incorrect advice given by accountants could lead to financial losses for clients, and E&O insurance provides protection against such claims. Directors and officers liability insurance (D&O) is meant for claims against individuals in management positions, whereas general liability insurance and employers liability insurance do not provide coverage for professional advice or services.

David Florrell Started a Public Accounting Firm