How much does errors and omissions insurance cost?

Regardless of policy limits, the median monthly cost of errors and omissions coverage is $59 ($713 annually). The median cost offers a more accurate estimate of what your business is likely to pay than the average cost of business insurance because it excludes outlier high and low premiums.

Most small business owners (51%) pay between $500 and $1,000 per year for their E&O policy, and 18% pay less than $500. These figures were derived from an analysis of thousands of insurance policies purchased by Insureon small business customers.

While any small business that provides professional services runs the risk of a lawsuit over a work error, oversight, or negligence, some industries are riskier than others. Higher risk professions will pay more for liability insurance than lower risk businesses.

Here are some examples of how a profession’s level of risk can impact the cost of E&O coverage:

• Real estate professionals, such as agents and appraisers, pay a median premium of $665 per year. A missing contract clause or a failure to review a seller’s property disclosures could cost your client and land you in court.
• Finance and accounting professionals have relatively low risks and pay just $400 per year. Transposed numbers in a spreadsheet or a missed tax deadline could result in a customer’s financial loss.
• For insurance agents, mistakes like failing to review a policy for a client could lead to a lawsuit. The median cost for insurance professionals is $550 per year, depending on your insurance specialty and other factors.
• IT professionals pay a median premium of $730 per year for a technology errors and omissions insurance policy, which combines professional liability insurance with cyber liability insurance coverage.
• The costs of a single mistake by a building design professional like an architect or engineer could be incredibly high. That’s why their median annual premium for E&O insurance is $1,705.

The claim limit on common errors and omissions policies varies significantly, from $250,000 to $2 million. However, most Insureon customers (61%) purchase a $1 million / $1 million policy. This includes:

$1 million per-occurrence limit. While the policy is active, the insurer will pay up to $1 million to cover any single claim.

$1 million aggregate limit. During the lifetime of the policy (usually one year), the insurer will pay up to $1 million to cover all claims.

If your business needs an errors and omissions policy that pays out more per incident or per year, then you’ll need to purchase a more robust policy with a higher premium.

E&O insurance quotes will vary based on several factors. In addition to choosing lower policy limits, these tips can also keep costs down:

Pay your entire premium upfront. 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.

Keep continuous coverage. While it’s possible to purchase professional liability 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” professional liability 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 professional liability lawsuits. Learn more about claims-made insurance coverage.

Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific policy.

• General liability insurance
• Business owner’s policy
• Workers' compensation insurance
• Cyber liability insurance
• Commercial umbrella insurance
• Commercial auto insurance
• Employment practices liability insurance
• Directors and officers insurance