Errors & Omissions insurance (“E&O,” also known as Professional Liability insurance) offers protection when a customer claims that your professional work caused them a financial loss.
For example, your digital trading platform goes down during trading hours and customers lose money because they can’t make planned trades.
In most cases, the customer “claim” takes the form of a lawsuit. Whether or not you’ve actually done anything wrong, you’ll have to defend your startup in court or risk a summary judgment (aka the judge saying you have to pay the plaintiff whatever amount they asked for).
E&O can cover your legal costs in these cases, including attorney fees, court costs and any settlement or judgment you’re required to pay. What’s really nice is that this policy can cover those fees regardless of whether you’re ultimately found liable.