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How Much Does Errors & Omissions (E&O) Insurance Cost? [2026 Update]
Quick answer: Most small businesses pay between $500 and $3,000 per year for errors and omissions insurance, or roughly...
Errors & Omissions Insurance Coverage
In the event your company or an employee delivers inadequate work or exhibits negligence while offering a service, your company may be liable for fines and or monetary damages the recipient may incur. E&O insurance protects companies from claims made by a consumer against an individual or individuals who offer consultation or services.
Acquiring a professional liability insurance policy will help protect businesses against the following types of claims:
- Inaccurate advice/consulting
- Failure to act (Omission)
- Negligence
- Misrepresentation
- Good faith & fair dealing violations
- Errors in services provided
In the event of a lawsuit with one of the related claims above, a typical E&O insurance policy will help businesses cover the following financial costs:
- Court costs & attorneys fees
- Administrative costs
- Settlement fees
It is important to understand that a professional liability insurance policy will only help businesses cover the claims discussed above if the claim has been filed within the policy period or extending reporting period and if the incident occurred on or after the retroactive date.
What E&O Insurance Typically Does Not Cover
Although errors & omissions insurance covers a wide variety of claims, there are areas that are not typically covered including:
- Intellectual property taken without permission
- General liability claims causing injury
- Employee claims for injuries or illness
- Illegal acts
Those exclusions point to the policies that pair with E&O. Injury and property damage claims belong to general liability insurance, employee injuries to workers compensation, and data breaches to cyber liability insurance. Note that a business owners policy does not include E&O either, so professional firms typically add it as a standalone policy.
Who Should Acquire E&O Insurance?
Most businesses should acquire an E&O insurance policy, but businesses who provide consulting services are generally required to hold a policy.
Some common examples of professions/businesses who are typically required to acquire an errors & omissions policy include:
- Insurance brokers
- Attorneys
- Financial advisors
- Real estate agents
- Medical professionals
Factors Which Influence The Cost Of An Errors & Omissions Policy
Not all businesses are created equal, which means the cost of a professional liability insurance policy varies depending on the unique needs, risks and liabilities of each business. In general, businesses can keep their overall policy cost down by providing proper training to their staff, keeping check on quality control or following up with clients about their satisfaction with the company.
The following factors tend to influence the cost of an E&O insurance policy.
Higher Risk Industries
Businesses which operate within a higher risk industry often pay more for coverage than businesses within industries that are considered to be lower risk.
Coverage Limit
The higher coverage limit a business requires, the higher the professional liability insurance policy premiums will be.
History Of Liability Claims
For businesses with a history of liability claims made against them more than likely will have to pay more for their errors & omissions insurance coverage.
Location Of Operations
E&O insurance coverage rates will vary depending on the businesses location of operation. Businesses that are located in highly populated cities typically pay more than businesses located in rural settings.
As a benchmark, most small businesses pay between $500 and $3,000 per year for E&O coverage, with many professional service firms landing between $700 and $1,500. For detailed pricing by profession and revenue, see our full E&O cost breakdown.
Frequently Asked Questions
What does errors and omissions insurance cover?
E&O insurance covers claims that your professional work was negligent, inaccurate, incomplete, or late, including failure to deliver a promised service. It pays attorney fees, court costs, settlements, and judgments for covered claims, even when the claim has no merit. Coverage applies to work performed after the policy's retroactive date when the claim is reported within the policy period.
Is errors and omissions insurance the same as professional liability insurance?
Yes. Errors and omissions insurance and professional liability insurance are two names for the same coverage. E&O is the more common term in fields like insurance, real estate, and technology, while professional liability is used for doctors, lawyers, architects, and consultants, where it may also be called malpractice insurance.
What is the difference between E&O and general liability insurance?
General liability covers physical risks: bodily injury to third parties and damage to their property. E&O covers financial harm caused by your professional work, such as a mistake, missed deadline, or bad advice that costs a client money. A client slipping in your office is a general liability claim; a client suing over a costly error in your work is an E&O claim. Most professional firms need both.
Who needs errors and omissions insurance?
Any business that gives advice, makes recommendations, designs solutions, or provides professional services for a fee should carry E&O. It is commonly required by law, licensing boards, or client contracts for insurance agents, real estate professionals, attorneys, financial advisors, accountants, consultants, and technology firms.
How much does errors and omissions insurance cost?
Most small businesses pay between $500 and $3,000 per year for E&O coverage, with many professional service firms landing between $700 and $1,500. Premium depends on your profession's risk level, revenue, claims history, years in business, and the limits and deductible you choose. Higher risk fields such as financial services pay more than lower risk consultancies.
Does E&O insurance cover data breaches or cyber attacks?
No. E&O responds to claims about the quality of your professional work, not security incidents. A data breach, ransomware event, or stolen client records requires cyber liability insurance. Many professional firms carry both because a single incident, like a breach that also delays client deliverables, can trigger claims under each policy.
Reach Out To Pro Insurance Group
With the risks and liabilities associated with potential service or product-based errors, it is imperative that your company acquires an errors & omissions insurance policy. For more information or to acquire a policy today, give Pro Insurance Group a call at 833.776.4671 or by requesting a quote online.