What is errors & omissions insurance in the context of a Registered Investment Advisor (“RIA”)?

Definition: Professional liability insurance that covers both errors (ex: the input of an erroneous trade order) and to protect against certain types of lawsuits against the firm.

When used in an RIA context: “It is standard practice for an RIA to have errors & omissions insurance.”

See also: Episode 46, Episode 83, Vendors (E&O), E&O