# Errors and omissions (E&O) insurance

> Errors and omissions (E&O) insurance is professional liability coverage that pays claims against an advisor for mistakes or negligence in the advice or service they gave.

Canonical page: https://find.wellspent.co/glossary/errors-and-omissions-insurance/
Also called: E&O insurance, professional liability insurance

If an advisor's mistake costs you money, such as an instruction never carried out, E&O coverage can mean there is money to pay a claim. It doesn't cover ordinary market losses on sound advice, and it is different from SIPC, which only applies when a brokerage firm fails.

Whether an advisor must carry it depends on where they are registered. In July 2026, Washington's securities division proposed requiring every state-registered adviser to carry at least $1,000,000 per claim and file proof each year. In the division's survey, 87 percent of responding advisers already carried $1 million or more.

## How to check

Ask whether the firm carries E&O insurance, the coverage per claim, and whether it covers every service the firm provides you.

## Sources

- [Washington Department of Financial Institutions, Securities Division, proposed rules for investment advisers, WSR 26-15-068 (filed July 15, 2026), new WAC 460-24A-051](https://lawfilesext.leg.wa.gov/law/wsrpdf/2026/15/26-15-068.pdf)

## Related terms

- [SIPC (Securities Investor Protection Corporation)](https://find.wellspent.co/glossary/sipc.md)
- [Custody](https://find.wellspent.co/glossary/custody.md)
- [Fiduciary](https://find.wellspent.co/glossary/fiduciary.md)
- [Registered investment adviser (RIA)](https://find.wellspent.co/glossary/ria.md)