Small businesses need Errors & Omissions (E&O) insurance to protect against claims of negligence, mistakes, or inadequate work that could result in financial loss for clients. Even with the best intentions, errors happen, and a single lawsuit—whether valid or not—can lead to costly legal fees, settlements, or judgments that could cripple a small business. E&O insurance covers legal defense costs, court fees, and potential damages, ensuring financial stability and credibility. It is especially crucial for service-based businesses like consultants, real estate agents, and IT professionals, where client expectations and contractual obligations are high. Without E&O insurance, a business risks paying out-of-pocket for claims that could drain resources or even force closure. Additionally, many clients require proof of E&O coverage before signing contracts, making it a key factor in securing and maintaining business relationships. Ultimately, E&O insurance safeguards a small business’s reputation, finances, and long-term viability.