What type of insurance insures against losses arising from employee negligence?

The correct answer is Professional Liability Insurance, which specifically insures against losses in situations where a professional's negligence or failure to meet professional standards results in harm to clients. This type of insurance is particularly crucial for those who provide expert advice or services, such as doctors, lawyers, and accountants.

Professional Liability Insurance covers claims related to mistakes or oversight in the professional services provided, ensuring that the insured party is protected financially from lawsuits that may arise due to these issues. This means if an employee commits an error or omits necessary information while performing their professional duties, this insurance can help cover any resulting liabilities.

While other types of insurance may cover various aspects of liability, only Professional Liability Insurance directly addresses negligence specific to professional services and the resulting financial losses incurred by clients. This makes it essential for professionals in fields where errors can lead to significant repercussions.