E&O Insurance From $42/Month

E&O — short for errors and omissions insurance, also called professional liability insurance — pays defense costs and damages when a client alleges your professional work caused them financial harm. The "errors and omissions" name reflects the two core claim types: errors (something you did wrong) and omissions (something you should have done but didn't).

It's the single most important coverage for any professional who sells advice, recommendations, or services. A standard general liability policy will not cover financial harm caused by your work — only physical injury and property damage to third parties. If a marketing consultant's SEO recommendations cost a client $50K in lost revenue, general liability won't respond. E&O will. The same is true for missed deadlines, breach of contract, professional negligence, and unintentional errors in deliverables.

For a solo professional with under $250K in annual revenue, E&O typically runs $30-$80/month. Agencies and firms with $1M-$5M in revenue pay $200-$800/month. The drivers, in order:

• Industry / specialty. Tech, financial advisory, healthcare-adjacent, and life-sciences professionals pay 2-4x what marketing or HR consultants pay because claim severity is much higher.
• Annual revenue. Most E&O carriers price as a percentage of revenue (0.3%-1.5% annually).
• Coverage limit. Bumping from $1M to $5M typically adds 50%-100% to the base premium. Going to $10M doubles again.
• Deductible. $2,500 vs $1,000 deductibles save 10-15% on premium.
• Claims history. One paid E&O claim in 5 years typically adds 20-30% at renewal. Two claims often triggers non-renewal.
• Retroactive date. If you're moving from one carrier to another, the retroactive date — how far back the new policy covers prior work — directly impacts price. A full prior-acts pickup costs more but eliminates a coverage gap.

Four moves that materially affect your protection AND your premium:

1. Match your limit to your largest client contract. Enterprise master service agreements often require $2M-$5M E&O minimums. If you sign an MSA without meeting the limit, your existing policy may not respond. Always size your limit to your biggest client, not your average.
2. Confirm full prior-acts when changing carriers. If you're leaving carrier A for carrier B, ensure carrier B writes "prior acts coverage" back to your original retroactive date. A gap means claims from prior work won't be covered.
3. Add an "extended reporting period" (tail) at retirement or sale. E&O is "claims-made" coverage — it only responds to claims filed while the policy is active. When you retire or sell your business, buy a 3-7 year tail to cover claims that arrive after your operations end.
4. Review the definition of "professional services." Some policies narrowly define your services to specific activities. If you pivot or add new service lines, update the policy or risk an uncovered claim.