The median Errors and Omissions Insurance policy sold by Insureon costs $758 per year, or about $63 per month. But the price you'll pay ultimately depends on the terms of your policy and the business you're protecting. Take a look at our E&O cost analysis for a more detailed breakdown.
Like any insurance policy, a policy's cost depends on certain risk factors – the riskier your business, the higher your insurance premiums. Let's explore the factors that affect how much your E and O Insurance will cost and ways you can lower your risk profile (and your rates).
How Risk Factors Affect the Cost of E&O Insurance
When you speak with an insurance agent, you'll need to provide information about your business so insurance companies can properly assess your risks. The following questions offer an overview of the business characteristics that can affect your E and O Insurance costs:
- How big is your company? Your rates may change based on two measures of size: the number of employees you have and your revenue.
- What industry is your business in? Some industries are more prone to errors and omissions lawsuits than others.
- Where is your business? The expense and frequency of lawsuits can vary by location. For instance, New York lawyers charge more than Oklahoma lawyers.
- How are your contracts written? Well-written contracts with your clients can nip a lot of liability exposure in the bud, but if your contracts are poorly written (or you don't use contracts at all), you're at greater risk.
- How do you train your employees? Because your company can be sued over the actions of your employees, their training and experience matters.
- Have you been sued for errors in the past? Your provider will look into whether you've been sued, whether you've won or lost, and how you've dealt with prior mistakes.
- What are your quality-control procedures? If you take measures to ensure client satisfaction while delivering your services, you're less likely to be sued.
Your insurance provider also plays a significant role in how your risks are measured and weighed. An Insureon agent can help figure out which insurance providers specialize in policies for your industry, which can reduce your rates.