What is E&O insurance and why is it important for the RME?

• A. Health insurance for the project team.
• B. Errors and omissions insurance protects against claims of professional negligence, covering potential damages arising from design or advising errors.
• C. General liability insurance for property damage.
• D. Life insurance for firm principals.

Answer: (B)

E&O insurance, short for errors and omissions, is professional liability coverage that protects a firm when a client claims that advice, design, or professional services fell short of expected standards, resulting in financial loss. For an RME, this matters because the work involves design calculations, specifications, and guidance that clients rely on. If a client alleges that a design error or poor advice caused costs, delays, or other damages, E&O coverage helps pay for legal defense, settlements, or judgments up to the policy limits. It also often covers work by employees or subcontractors tied to the firm.

This isn’t about health insurance for the team, property damage (that’s general liability), or personal life insurance for principals. E&O is specifically about protecting against claims of professional negligence related to the services the firm provides.