Cheap errors and omissions (E&O) insurance 

Errors and omissions insurance, also known as professional liability insurance, is an important policy for small businesses that give professional advice or provide professional services to clients. It protects your business from client lawsuits claiming your mistake or oversight cost them money.

These four steps can help you get the right E&O coverage for your small business at an affordable rate:

• Shop around. Compare E&O insurance policies and quotes from different insurers
• Bundle policies. Combine your E&O coverage with other insurance policies for a discount
• Customize your policy. Choose cost-saving options on your E&O insurance coverage
• Keep claims history clean. Cut your number of insurance claims and pay less for insurance

When purchasing E&O, you need to make sure your policy fulfills any legal or contractual requirements you may have. You also don't want to overpay for a policy with more coverage than you need.

Different insurance companies will offer different prices for errors and omissions insurance. Some may even specialize in serving your industry and offer more affordable policies with tailored protection.

You could reach out to insurance companies directly and ask for quotes on their errors and omissions policies. Thankfully, there’s an easier method.

Instead, you can contact an insurance agent or broker to get errors and omissions quotes from several insurance companies. Just make sure the insurance agency or brokerage represents multiple companies since some work with one exclusively.

They’ll navigate the industry to find an affordable E&O policy that meets all your needs. Plus, you can ask them to ensure the policy you purchase provides the coverage you need to fulfill contracts, meet legal requirements, or reduce risks common to your profession.

Working with an Insureon agent can usually save you money. You can compare various errors and omissions insurance quotes from top-rated providers by filling out our easy online application. A licensed Insureon agent will then be available to walk you through your options and help you find the right insurance policy that fits your risks and budget.

For example, choosing lower policy limits can help you save money on your policy. An experienced agent can help you set appropriate limits, recommend endorsements that match your risks, and also let you know which add-ons you can safely skip.

Without expert help, you might not know if the policy in front of you provides too much or not enough coverage.

In addition, some insurance carriers offer free contract review if the insured already has a contract ready. An Insureon agent can help you with this. If you don't already have a contract, you would need to contact a local attorney to draw up a business contract.

Insurance companies often give discounts when you bundle multiple policies together. This includes your errors and omissions policy.

Tech and IT companies can often combine their E&O coverage and cyber insurance in a bundle called technology errors and omissions insurance, or tech E&O.

A tech E&O policy provides liability coverage related to:

• Oversights and mistakes
• Failure to deliver promised IT services
• Accusations of professional negligence
• Third-party cyber liability (data breach lawsuits)
• Intellectual property and media liability (for certain professions)

Even though most errors and omissions policies provide similar coverage, you can customize your policies in unique ways to save more money.

This includes:

A deductible is the amount of money you must pay toward a claim before your insurance benefits kick in. Say an E&O lawsuit costs a total of $50,000 and your deductible is $5,000. The insurance policy will cover $45,000, after you have paid the $5,000 deductible.

When it comes time to choose an insurance policy, the deductible should be an important factor in your decision. In general, higher deductibles mean lower premiums. The trade-off is that in the event of a claim, your business is responsible for paying a larger share up front.

A higher deductible might be worth it if you're mostly concerned about unlikely but very expensive claims.

If a claim does occur, the amount you pay towards the deductible might be insignificant compared to what the insurance policy covers. On the other hand, smaller losses that are less than your deductible may not be covered at all under the policy.

You can choose to pay your insurance premiums once a year rather than on a monthly billing cycle. While making a smaller payment each month requires less money upfront, it often costs more since insurers often offer discounts to businesses that pay an annual premium.

While it’s possible to purchase omissions coverage when you start a project and drop coverage when you complete the project, this cost-cutting strategy can backfire. To collect insurance benefits, your “claims-made” E&O policy must be active:

• When an alleged mistake occurs
• When the claim is filed

In short, continuous coverage is key if you don't want to pay out of pocket for E&O lawsuits.

As with auto insurance, a claim on your E&O policy can cause your premium to go up. Insurance companies may also be reluctant to insure a business with a lengthy record of claims, unless that business is willing to pay more.

Fortunately, you can take steps to reduce the likelihood of a claim. Errors and omissions claims often arise from disagreements with clients. Clear communication, detailed contracts, and other measures can help you and your clients stay on the same track.

By keeping your claims history clean, you will reduce your losses. Having direct and straightforward conversation with clients, while also maintaining other controls, can help prevent potential losses.

While errors and omissions insurance covers major client or customer risks, it does not provide complete protection.

Other insurance products to consider include:

General liability insurance: A general liability policy covers common business risks like customer injury, damage to a customer’s property, and advertising injury.

Commercial auto insurance: This policy covers vehicles owned by your business and is required in nearly every state. It typically pays for accidents and damages related to theft, weather, and vandalism. 

Workers’ compensation insurance: Workers' comp is required in almost every state for businesses that have employees. It can cover medical expenses for work injuries, which are not often covered by regular health insurance.

Business owner’s policy (BOP): A business owner's policy (BOP) bundles general liability insurance with commercial property insurance. It generally costs less than buying these two policies separately.

Complete Insureon’s easy online application today to find affordable E&O insurance coverage from top-rated U.S. companies. Once you find the right policy for your small business, you can begin coverage in less than 24 hours.