Errors & omission insurance is to protect a business from lawsuits claiming that a business failed to perform the contracted work. It will also cover in the event there are claims that mistakes were made in the course of doing the contracted work.
In the regular course of doing your job you may unexpectedly become a defendant in a lawsuit. Your errors & omission insurance will cover all of your salaried employees and any independent contractors that you may hire to do work for you. Clients for whom you provide a service may be able to find things they are not happy with, but will work with you on getting the problem resolved. However, in the case when something you did or were perceived to have done cost that client money is when you may find yourself involved in a lawsuit. There are thousands of scenarios that could happen and end up in the legal system.
If you do find yourself in a lawsuit and lose the judgment, you may not have the resources to pay what the court has found appropriate. If you have errors & omission coverage in place the insurance company will pay the settlement.
You are likely to have several different insurance coverages in place. You may want to sit down with your insurance agent and see if all the bases are covered to protect your business.