What is the purpose of Errors and Omissions insurance?

The purpose of Errors and Omissions insurance, often referred to as E&O insurance, is primarily to protect businesses against claims of negligence, errors, or omissions that occur while providing professional services. This insurance is particularly relevant in the context of exports, as it can help cover a business against the potential financial consequences of mistakes in their operational activities, including contracts, shipping documents, and compliance with international regulations.

By having E&O insurance, a business can ensure that it is safeguarded against claims that may arise from its exports and operational processes, making option C the most relevant choice. This type of insurance often functions as an umbrella policy, covering a range of operational concerns rather than being limited to specific events or liabilities, hence its suitability for businesses engaged in international trade.

Other choices are more limited in scope; for instance, covering transportation-related liabilities focuses solely on logistics rather than the broader operational issues that E&O insurance encompasses. Protecting against product recalls is also a narrow focus, missing the various ways companies might be held liable for professional services. Insuring against all business activities is overly broad and does not take into account the specific nature of E&O insurance, which is designed to address particular risks related to professional services and operational errors rather than every conceivable