Wedding Planning Certification Practice Test

What type of insurance protects against mistakes or misunderstandings with clients?

1. General liability insurance

2. Workers' compensation insurance

3. Errors and omissions insurance

4. Property insurance

The correct answer is: Errors and omissions insurance

Errors and omissions insurance, also known as E&O insurance, is specifically designed to protect professionals from claims of negligence or inadequacy in their work, which can arise from mistakes or misunderstandings with clients. In the context of wedding planning, for example, if a planner fails to fulfill a part of the contract or makes an error that negatively impacts the client's event, this type of insurance would cover legal fees and any settlements that may result from such claims. General liability insurance primarily covers physical injury and property damage claims; it does not provide protection against professional mistakes. Workers' compensation insurance is focused on providing benefits to employees who get injured on the job, which is unrelated to client services. Property insurance safeguards physical assets and equipment but does not extend to professional risks or liabilities associated with client relationships. Hence, errors and omissions insurance is the most appropriate choice for addressing issues that stem from mistakes in client engagements.