What is Errors and Omissions?
Errors and Omissions (E&O) insurance, also known as professional liability insurance, helps protect businesses and professionals if a client claims a service mistake caused them financial harm. This coverage typically applies to industries where advice, consulting, or professional services are a core part of the work.
Who Needs It
E&O insurance is important for professionals whose clients rely on their expertise. This includes:
- Consultants and business advisors
- Real estate agents and brokers
- Insurance agents
- Technology and IT service providers
- Accountants and tax preparers
- Marketing and advertising professionals
If your business offers services or advice that could lead to a financial loss for a client, E&O coverage can help protect you from lawsuits and costly claims.
What It Typically Covers
Errors and Omissions insurance usually helps cover:
- Claims of negligence or failure to deliver promised services
- Mistakes or oversights in professional work
- Legal defense costs, even if the claim is unfounded
- Settlements and judgments, up to policy limits
This coverage focuses on financial loss rather than bodily injury or property damage, which are generally covered by general liability insurance.
Common Exclusions and Limitations
While E&O insurance can be essential, it doesn’t cover everything. Common exclusions include:
- Intentional wrongdoing or fraud
- Illegal acts
- Employee injuries (covered by workers’ comp)
- Property damage or bodily injury (covered under general liability)
- Claims from services not listed in your policy
Review your policy carefully to understand what’s included and excluded. Coverage terms can vary by provider and profession.
Factors That Influence Cost
The cost of Errors and Omissions insurance depends on several factors, such as:
- Your industry and risk level
- Company size and revenue
- Claims history
- Coverage limits and deductible choices
- Years of experience
Higher-risk industries or businesses with past claims may pay more for coverage. Your deductible and policy limits will also affect your premium.
Proof of Insurance & Compliance
Many clients require proof of E&O coverage before signing a contract. Some industries or states may also have licensing requirements that include carrying E&O insurance. A Certificate of Insurance (COI) is the standard document used to show proof to clients or regulators.
How to Get a Quote
Getting a quote for Errors and Omissions insurance is fast and easy. You’ll typically need to provide information about your business, services, and claims history. Get a quote today to find coverage that fits your needs.
Frequently Asked Questions
What does E&O insurance protect against?
It helps protect your business from claims of mistakes, omissions, or negligence in the services you provide.
Is E&O insurance required by law?
It’s not always legally required, but some industries or clients may require it as part of doing business.
Does E&O insurance cover independent contractors?
If listed on your policy, independent contractors can be covered—but this depends on the insurer and your policy terms.
Can I get E&O insurance as a freelancer?
Yes, many freelancers and solo professionals carry E&O coverage to protect against client disputes or claims.
How is E&O different from general liability insurance?
E&O covers financial losses due to service errors, while general liability covers physical injuries or property damage.
Still have questions? Talk to a local insurance expert.