## What does E&O Insurance primarily protect against? - [x] Claims of negligence and errors in advice - [ ] Physical damages to property - [ ] Routine business expenses - [ ] Personal injuries suffered by clients > **Explanation:** E&O Insurance is designed to protect against claims of negligence, errors, or oversights in professional services. ## Why might a company be sued even if the claims are false? - [ ] They released a confusing advertisement - [ ] They accidentally spilled coffee on a client - [x] Clients can file suits regardless of the validity of their claims - [ ] The company forgot the client’s birthday > **Explanation:** Unfortunately, clients may file lawsuits even if the claims are baseless, hence the importance of having E&O Insurance. ## Which of the following is a key benefit of E&O Insurance? - [x] It covers legal defense fees even for false claims - [ ] It guarantees success in court - [ ] It replaces lost business revenue - [ ] It provides health insurance for employees > **Explanation:** One of the significant benefits of E&O Insurance is that it covers legal defense fees, irrespective of the merits of the claims. ## Who typically needs E&O insurance? - [ ] Fast-food restaurant workers - [x] Professionals offering services or advice - [ ] Retail store employees - [ ] Freelance artists (if they like using special paint) > **Explanation:** Professionals who provide specialized services or advice such as consultants, lawyers, or IT experts should consider E&O insurance. ## What is usually not covered by E&O Insurance? - [x] Intentional misconduct - [ ] Errors made while assisting clients - [ ] Negligent acts - [ ] Neglected service requests > **Explanation:** E&O Insurance does not cover intentional misconduct; it’s primarily focused on protecting against inadvertent mistakes. ## If a fireworks company sets off a fire, would E&O cover it? - [ ] Yes - [x] No, that's general liability - [ ] Only if explicitly stated - [ ] Yes, if it was really colorful > **Explanation:** E&O insurance wouldn't cover physical damage from fireworks—that falls under general liability. ## Can you get E&O coverage for global operations? - [x] Yes, with the right policy - [ ] No, only within the U.S. - [ ] Yes, but it may cost more - [ ] No, it's strictly a local coverage > **Explanation:** You can get E&O coverage for global operations, but ensure your policy explicitly covers claims made outside of the U.S. ## If you don't have E&O Insurance, what's your best alternative? - [ ] Skip the insurance altogether - [x] Make sure you're error-free (good luck!) - [ ] Offer clients cookies instead of advice - [ ] Consider a one-day liability coverage > **Explanation:** While error-free service is ideal, the best option practically is to obtain E&O insurance to cover potential claims. ## What’s the best way to choose the right E&O coverage? - [ ] Ask one of your pets - [ ] Guess and hope for the best - [x] Assess your business risks and consult with an insurance broker - [ ] Pick the cheapest option > **Explanation:** Assessing your business risks and discussing coverage options with an insurance broker is a smart way to choose adequate E&O coverage. ## Is it essential to have E&O Insurance in all professions? - [ ] Absolutely not, some are error-proof - [ ] Only for high-risk fields - [x] It’s recommended for service-oriented professions - [ ] Only if you have a large client base > **Explanation:** E&O Insurance is essential for service-oriented professions to safeguard against potential claims regardless of the scale of business.