How much does errors and omissions insurance cost?
How much does errors and omissions insurance cost?
$30 – $150 average monthly cost (per employee)
Errors and omissions insurance cost
Errors and omissions insurance costs $30 to $150 per month, per employee on average, depending on the industry, business size, coverage needs, claims history, and geographic location. Errors and omissions insurance is also called E&O or professional liability insurance.
| Industry | Average monthly cost (per employee) |
|---|---|
| Accountant & finance | $40 – $100 |
| Architect | $100 – $200 |
| Business consultant | $75 – $150 |
| Carpet cleaner | $50 – $100 |
| Caterer | $30 – $100 |
| E-commerce | $75 – $100 |
| Engineer | $100 – $200 |
| General contractor | $75 – $100 |
| Handyperson | $50 – $100 |
| Healthcare | $35 – $55 |
| Interior designer | $50 – $150 |
| IT / Technology | $60 – $110 |
| Realtor | $75 – $150 |
| Media & Advertising | $50 – $100 |
Businesses that are more prone to allegations of negligence or mistakes pay more for coverage compared to lower-risk professions.
Monthly premiums costs are per employee, so sole proprietors and businesses with few employees will pay considerably less than businesses with a larger number of employees.
Professional liability insurance cost by insurer
Professional liability insurance provides coverage for businesses that offer professional services or advice. The insurance protects against claims of negligence, mistakes, or failure to perform one's duties, which can result in financial losses for clients.
The following table details some of the most well-known insurance companies for professional liability insurance.
| Company | Average monthly cost (per employee) |
|---|---|
| NEXT Insurance | $20 – $45 |
| Hiscox | $30 – $45 |
| Insureon | $33 – $61 |
| Progressive | $40 – $60 |
| Pogo | $35 – $80 |
| Chubb | $50 – $100 |
| The Hartford | $75 – $250 |
Additional business insurance costs
Professional liability insurance is just one of several types of insurance your business should carry. Check out our Business insurance cost guide to better understand the different insurance options and costs for your company.
Errors & omissions insurance cost factors
Several factors affect the cost of E&O or professional liability insurance:
Industry risk: Businesses or professions with a higher risk for mistakes pay more for coverage than those considered lower risk.
Employee count: More employees means a greater likelihood of claims. A sole proprietor without employees pays much less than a business with numerous employees to cover.
Years in business: Newer businesses may pay higher premiums than established firms with more experience, as the risk for the newer business has not been established.
Claims history: Businesses with a history of prior E&O claims pay more for coverage than those with clean claims records.
Location: Insurance rates vary by state and region, with some areas considered higher risk than others.
Deductibles: Opting for a higher deductible means you'll cover more of the financial burden if you file a claim. However, this translates to a lower monthly premium.
Coverage limits: The higher the coverage limit, the more risk the insurance company incurs and the higher the premium the business will pay.
Policy add-ons: Extra coverage options, such as cyber liability or employment practices liability insurance, can increase premium costs.
Errors and omissions insurance FAQs
What is errors and omissions insurance?
Errors and omissions insurance, also called professional liability insurance, is a specialized form of business coverage that protects professionals and companies against claims of negligence from clients or customers.
What does professional liability insurance cover?
Professional liability insurance covers financial or economic damages from the following:
Negligence, mistakes, or failure to deliver promised professional services that result in financial losses or damages to clients
Copyright infringement, libel, slander, and other personal injury claims related to the provision of professional services
Legal defense costs and court settlements/judgments when the business is sued for errors or omissions in their professional services, regardless of whether a mistake was actually made
Work performed by the company’s employees, including temporary staff and independent contractors
What does professional liability insurance not cover?
Professional liability insurance does not cover intentional wrongdoing, criminal acts, bodily injury, property damage, or claims covered by other types of insurance like workers' compensation insurance or unemployment benefits.
Who needs professional liability insurance?
If your business success depends on the expertise you provide to clients, you should carry professional liability insurance. It protects your business from financial losses due to lawsuits from clients alleging negligence, errors, or omissions in your professional services.
How much professional liability insurance do I need?
The amount of professional liability insurance you need depends on your industry, as some professions face a higher risk of lawsuits than others. Generally, most businesses start with $1 million in coverage per claim and a $1 million aggregate (total) limit. Businesses that need increased protection pay more for higher limits.
Is professional liability insurance the same as malpractice insurance?
Professional liability insurance is not the same as malpractice insurance, though they are related. Malpractice covers claims related to physical harm or injury to patients or clients, while professional liability insurance covers claims of financial loss or damage, even if no physical harm occurred.
Getting quotes from insurance companies
To get the most competitive quotes and the best errors and omissions insurance coverage for your business, follow these suggestions:
Get quotes from at least 3 to 5 insurance companies to compare prices and coverage options.
Be prepared with your industry, employee count, years in operation, claims history (if any), and desired coverage limits to get the most accurate quotes.
Consider an insurance broker to help you navigate the E&O market, find you competitive quotes, and explain all the coverage options in plain English.
Ask about coverage details, exclusions, deductibles, policy limits, and the claims process.
Be clear and honest about your business and its risk profile. Withholding info could lead to coverage problems later.
Bundle your E&O policy with other coverage, such as property and casualty coverage, to earn a discount.
Use online resources to compare quotes from multiple insurers, then follow up with any promising companies to discuss your specific needs.
Don’t skimp on coverage to save a few bucks. Make sure the policy offers the protection your business truly needs.
Questions to ask an E&O insurer
Ask these questions to understand the coverage that best protects your business from financial risk:
How long has your company been offering professional liability insurance?
Can you provide me with references from other businesses in my industry that use your company for E&O insurance?
Can you explain how your company determines the appropriate coverage limits for a business like mine?
What specific types of professional services does this policy cover?
Are there any exclusions to coverage I should be aware of?
Does this policy offer coverage for prior acts (work done before the policy start date)? If so, what are the limitations?
Does this policy cover claims arising from data breaches or cyberattacks? If not, do you offer separate cyber liability coverage?
What are the policy limits for each claim and the aggregate (total) amount covered in a year?
What is the deductible amount I would be responsible for in case of a claim?
Do you offer any discounts for bundling this policy with other types of business insurance?
What is the process for filing a claim under this policy?
Will the insurer provide legal defense in case of a lawsuit, even if they find the claim is frivolous?
What is the claims satisfaction rating for your professional liability insurance?
Does this policy offer any add-on coverage options that might be relevant to my business?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.