What type of insurance covers actions undertaken in the course of a professional activity?

Errors and omissions insurance is specifically designed to protect professionals from claims of negligence or inadequate work while providing their services. This type of insurance is crucial for individuals in various professions, including real estate agents, consultants, and financial advisors, as it covers legal costs and damages that may arise from mistakes or failures in the execution of their professional duties.

This insurance becomes essential when a client alleges that a professional's actions or decisions led to a financial loss or other damages. By having errors and omissions insurance, professionals can safeguard themselves against potential lawsuits, ensuring their business and personal finances remain protected against claims arising from their professional activities.

While malpractice insurance is similar and often associated with medical professionals, errors and omissions insurance is broader and applicable across various fields. The other options listed do not specifically target the coverage of professional conduct in the same manner, making errors and omissions insurance the most appropriate choice for this context.