Errors & Omissions (E&O) Insurance Cost
Get business insurance with optimized coverage to meet your exact needs
Prefer to speak with a CoverWallet consultant?
Errors & Omissions (E&O) insurance, also referred to as professional liability insurance, protects your business from costly professional mistakes. Many businesses that offer professional services are at risk for claims of negligence, errors, or poor advice that caused financial or reputational loss to a customer.
So just how much will E&O insurance cost your business? There are many factors impacting premiums, but first, let’s consider the cost of not having E&O insurance. If a lawsuit is brought against your business, you could be facing hefty legal fees, including the cost of hiring an attorney and any settlements or damages. Even if the mistake wasn’t your fault, defending yourself can be quite expensive. With E&O insurance, you would be covered for legal costs up to a specified limit, meaning you won’t have to fork over a large sum out of pocket.
You’re at risk for E&O claims if you are a consultant or offer any professional services to clients for a fee. That includes a whole range of services, whether you’re offering clients advice on financial investments, designing a marketing strategy, or writing code for an internal software project they have in the works. Mistakes happen - even to the most well-trained professionals - and an unhappy client could sue. As previously mentioned, even if an error or omission ultimately wasn’t your fault, the cost of fighting a lawsuit in court could be devastating to your business. That’s why it’s so important to have E&O insurance coverage.
How much E&O insurance will cost your business depends on many factors. A few things your insurer will consider when providing a quote could include:
According to Trusted Choice, most small businesses will pay between $1,000 to $3,000 in annual premiums per $1 million worth of E&O coverage. So, while average figures an easy reference, your particular scenario will significantly impact the cost. Now, let’s take a look at some sample E&O insurance policy prices:
As you can see, costs can differ significantly based on geographic location and company size. The above are just estimates and don’t take into account all the factors that impact the cost of insurance. To find out the real cost of E&O insurance for your business, you should get a quote.