Errors and Omissions (E&O) insurance — also called Professional Liability Insurance — is one of those coverage types that’s easy to ignore until you really need it. If you provide any kind of professional service or advice, a single unhappy client can trigger a lawsuit that costs more than your annual revenue. E&O is what stands between you and that nightmare. Let’s break down what it costs, what affects the price, and what it actually covers.
What is the average cost of errors and omissions insurance?
For most small businesses, E&O insurance runs between $500 and $1,000 per year. Larger firms or those in higher-risk industries typically pay somewhere between $1,000 and $3,000 or more annually.
Those numbers are useful as a starting point, but they’re just averages. Your actual quote will depend on a handful of factors we’ll get into below.
What Is Another Name For Errors and Omissions Insurance
Errors and Omissions insurance is often referred to as Professional Liability Insurance. This type of insurance is designed to protect professionals from claims of negligence or mistakes in their professional services. It’s essential for anyone who provides expert advice or services to clients.
Why Is Errors and Omissions Insurance More Expensive Than General Liability Insurance
Errors and Omissions insurance tends to be more expensive than General Liability Insurance because it covers a broader range of risks. While General Liability Insurance covers physical injuries and property damage, E&O insurance covers financial losses due to professional mistakes or negligence. This makes it a more comprehensive and, consequently, more costly form of coverage.
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How much does E&O insurance cost per month?
Breaking it down monthly:
- Small businesses: roughly $40–$80/month
- Mid-size to larger firms: $100–$250+/month
If you’re a solo consultant or freelancer, you’re probably looking at the lower end of that range. A larger firm with multiple employees and significant client contracts will sit higher.
On a monthly basis, the cost of Errors and Omissions insurance can range from $40 to $80 for small businesses. For larger firms, the monthly premiums could be anywhere from $100 to $250 or more. These costs can fluctuate based on the specific needs and risk factors of the business.
How much is E&O insurance by state?
State-level regulations, local lawsuit frequency, and market competition all push costs up or down. Here’s a general picture for four commonly searched states:
| State | Typical annual cost (small business) | Typical annual cost (larger firm) |
|---|---|---|
| California | $600 – $1,200 | $1,200 – $3,500+ |
| Florida | $600 – $1,200 | $1,200 – $3,500+ |
| Texas | $550 – $1,100 | $1,100 – $3,200+ |
| Georgia | $500 – $1,000 | $1,000 – $3,000+ |
These are rough ranges. A tech consultant in San Francisco and a freelance copywriter in rural Georgia could both have California or Georgia addresses but very different actual premiums.
The cost of Errors and Omissions insurance can also vary significantly by state due to different regulations, risk factors, and market conditions. Below, we break down the costs in some key states.
How Much Is Errors and Omissions Insurance in GA?
In Georgia, small businesses can expect to pay between $500 and $1,000 per year for E&O insurance. Larger businesses might pay from $1,000 to $3,000 annually.
How Much Is Errors and Omissions Insurance in Florida?
In Florida, small businesses might pay between $600 and $1,200 annually for E&O insurance. Larger firms could see costs ranging from $1,200 to $3,500 or more.
How Much Does Errors and Omissions Insurance Cost In CA
In California, the cost of E&O insurance for small businesses typically ranges from $600 to $1,200 annually. Larger firms might see premiums from $1,200 to $3,500 or more.
How Much Is Errors and Omissions Insurance in GA
In Georgia, small businesses can expect to pay between $500 and $1,000 per year for E&O insurance. Larger businesses might pay from $1,000 to $3,000 annually.
Key factors that affect E&O insurance costs
Insurers look at several things when they price your policy:
Industry and risk level A financial advisor or attorney faces different exposure than a graphic designer. Higher-stakes advice = higher premiums. Contractors, architects, and engineers tend to see above-average rates because errors can cause expensive physical damage.
Revenue and business size More revenue usually means larger contracts and bigger potential claims. A firm billing $5M a year will pay more than a solo practitioner billing $80K.
Coverage limits and deductible A $1M per-claim / $2M aggregate policy costs more than $500K per-claim coverage. Choosing a higher deductible can meaningfully reduce your annual premium — just make sure you can actually cover that deductible out of pocket if a claim hits.
Claims history Had a claim in the last three to five years? Expect a surcharge. A clean history works in your favor and is one of the easiest long-term ways to keep premiums down.
Years in business New businesses sometimes pay slightly more because they have a thinner track record. After a few years without claims, your rates often stabilize or drop.
Policy structure: claims-made vs. occurrence Most E&O policies are written on a claims-made basis, meaning the policy in force when the claim is filed is the one that responds — not the policy that was active when the work was performed. This matters a lot in practice.
Example: You complete a consulting project in 2023. The client doesn’t discover the issue until 2025 and files a claim then. Your 2025 policy is the one that pays — not your 2023 policy. If you let your coverage lapse between those years, you could be unprotected.
Many claims-made policies also have a retroactive date — a cutoff before which acts aren’t covered even if the claim comes in while the policy is active. When you buy a new policy, try to get a retroactive date that goes back as far as possible.
Several key factors can influence the cost of Errors and Omissions insurance. These include the industry in which the business operates, the size of the business, the level of coverage required, and the business’s claims history. Businesses in high-risk industries or those with a history of claims may see higher premiums.
What does E&O insurance cover?
E&O insurance covers financial losses that clients or third parties suffer because of your professional mistakes, negligence, or failure to deliver promised services. Specifically, it typically covers:
- Legal defense costs — attorney fees, court costs, even if the claim turns out to be frivolous
- Settlements and judgments — amounts you’re ordered to pay or agree to pay to resolve a claim
- Claims of negligence — failing to meet the professional standard of care
- Errors and oversights — a wrong recommendation, a missed deadline, faulty advice
- Failure to deliver services — you promised a deliverable and it either wasn’t provided or wasn’t usable
Real-world example: A marketing consultant advises a client to run a campaign that violates a platform’s advertising policy. The campaign gets pulled, the client loses $40,000 in sunk costs, and they sue the consultant. E&O covers the consultant’s legal defense and any settlement up to the policy limit.
Just as important as what’s covered is what isn’t. Standard exclusions include:
- Intentional wrongdoing or fraud — if you knowingly cut corners or deceived a client, your insurer won’t bail you out
- Bodily injury and property damage — that’s what General Liability insurance handles
- Employment-related claims — wrongful termination, discrimination, harassment (those need EPLI coverage)
- Illegal acts — anything criminal
- Work done by subcontractors in many contractor-specific E&O policies — subcontractors often need their own coverage
Contractor-specific note: If you’re a trade contractor (plumber, electrician, HVAC tech, carpenter, etc.), standard professional liability E&O isn’t quite the right product — you want what’s called Contractors E&O, which covers damage to your own completed work caused by faulty workmanship. Your commercial general liability policy covers damage your work causes to other property, but your own work product is excluded from GL. Contractors E&O fills that gap.
Example: A plumbing company re-pipes a commercial building for $20,000. Six months later, a mistake in the piping causes sewage to flood the basement, destroying sections of pipe. The building damage goes through GL. The $20,000 in destroyed piping work? That’s a Contractors E&O claim.
Common exclusions in E&O insurance policies
Common exclusions in Errors and Omissions insurance policies include intentional wrongdoing, illegal activities, and claims related to bodily injury or property damage. It’s essential to read your policy carefully to understand what is and isn’t covered.
How much coverage do you actually need?
It depends on the size of your contracts and the stakes involved in your work:
- Freelancers and solo practitioners: $250,000–$500,000 per claim is often enough
- Small businesses with mid-size contracts: $500,000–$1,000,000
- Larger firms or high-stakes industries (finance, law, engineering): $1,000,000–$5,000,000+
Some clients — especially enterprise companies and government agencies — will require you to carry a minimum limit (often $1M per occurrence) before they’ll sign a contract. Check your client agreements.
The amount of coverage you need as a professional service provider depends on your industry, the size of your business, and the level of risk you face. Generally, small businesses might need coverage ranging from $500,000 to $1 million, while larger firms might require $1 million to $5 million or more.
Deductibles for E&O insurance: what’s reasonable?
Deductibles on E&O policies work a bit differently depending on the insurer. Some use a per-claim deductible, others use a per-occurrence structure. Contractor-focused E&O policies sometimes use a per-job deductible with a separate per-job limit and an annual aggregate.
A common structure for a small contractor might look like: $750 deductible per job, $5,000 limit per job, $30,000 annual aggregate.
For professional services firms, deductibles of $1,000–$5,000 are common. A higher deductible lowers your premium, but you need to be honest with yourself about what you could absorb if a claim came in. Choosing a $10,000 deductible to save $200/year isn’t a great trade if you’re a solo freelancer.
E&O insurance vs. general liability insurance
When comparing Errors and Omissions insurance to General Liability Insurance, it’s essential to understand that E&O insurance covers professional mistakes and negligence, while General Liability Insurance covers physical injuries and property damage. This broader coverage makes E&O insurance generally more expensive.
Is General Liability Insurance the same as Errors and Omissions Insurance
No, General Liability Insurance and Errors and Omissions Insurance are not the same. General Liability Insurance covers physical injuries and property damage, while E&O insurance covers financial losses due to professional mistakes or negligence.
What Is A Good Deductible For Errors and Omissions Insurance
A good deductible for Errors and Omissions insurance depends on your business’s financial situation. Generally, a higher deductible can lower your premiums, but it’s essential to choose a deductible that your business can comfortably afford in the event of a claim.
What does errors and omissions insurance cover
Errors and Omissions insurance covers claims of negligence, mistakes, and inadequate work. It protects professionals from financial losses due to lawsuits and claims related to their professional services.
THE SIMPLY INSURANCE WAY
E&O insurance vs. product liability insurance
Errors and Omissions insurance and Product Liability Insurance serve different purposes. E&O insurance covers professional mistakes and negligence, while Product Liability Insurance covers claims related to defective products. Businesses that provide both services and products may need both types of coverage.
Industries that typically need E&O insurance
Pretty much anyone who charges for professional advice or services should at least think about E&O. That said, it’s especially important in:
- Technology (software developers, IT consultants, managed service providers)
- Financial services (financial advisors, accountants, bookkeepers, tax preparers)
- Legal services
- Healthcare (malpractice is a form of E&O)
- Real estate agents and brokers
- Engineering and architecture
- Contractors (especially those doing design-build or complex trade work)
- Marketing and PR firms
- Management and business consultants
- Insurance agents (yes, really — agents need E&O too)
Is E&O insurance required by law?
E&O insurance isn’t legally required in most industries and states, but licensing boards for attorneys, financial advisors, and some real estate agents may mandate it.
In most industries and states, no — it’s not legally mandatory. But certain licensed professions (attorneys in some states, licensed financial advisors, real estate agents in several states) may face requirements through their licensing board or state regulator. And as mentioned above, clients or contracts often impose their own requirements.
Even where it’s not required, going without E&O is a gamble. A single lawsuit — even a frivolous one you eventually win — can easily generate $20,000–$50,000 in legal defense costs before you see a courtroom.
Errors and Omissions insurance is not required by law in most states, but it is highly recommended for professionals who provide advice or services. Some industries and clients may require it as a condition of doing business.
Are There Penalties for Not Having Errors and Omissions Insurance
While there are no legal penalties for not having Errors and Omissions insurance, the financial consequences of a lawsuit can be devastating. Without E&O insurance, you could be personally liable for any claims of negligence or mistakes in your professional services.
How to lower your E&O insurance premiums
A few practical moves that can reduce what you pay:
- Raise your deductible — this is the fastest lever, just don’t go higher than you can float
- Maintain a clean claims record — avoid small claims when you can handle them out of pocket
- Implement written contracts and engagement letters — clear scope of work reduces disputes
- Document everything — good records make claims easier to defend and discourage frivolous suits
- Bundle with other policies — some insurers offer discounts when you buy GL and E&O together
- Shop around — premiums for identical coverage can vary 30–40% across carriers for the same risk profile
There are several ways to lower your Errors and Omissions insurance premiums. These include increasing your deductible, maintaining a good claims history, and implementing risk management practices. Shopping around and comparing quotes from multiple providers can also help you find the best rates.
How to get E&O insurance quotes
The fastest way is to compare quotes online. You can get multiple quotes in minutes at SimplyInsurance.com without talking to anyone. Have your business revenue, years in operation, industry, and any claims history handy — that’s the core of what most quote forms ask for.
Simply Insurance may receive compensation when readers click partner links and an eligible quote is requested.
Getting a quote for Errors and Omissions insurance is relatively straightforward. You can use online platforms like SimplyInsurance.com to compare quotes from multiple providers. These platforms allow you to customize your coverage based on your specific needs and get a side-by-side comparison of policy features and prices.
Many insurance websites offer cost calculators to help you estimate your E&O insurance premiums. These calculators typically ask for information about your business, such as its size, industry, and claims history, to provide a more accurate estimate.
Now that you have a comprehensive understanding of Errors and Omissions insurance, it’s time to take action. Protect your business and your professional reputation by getting the right coverage. Use platforms like SimplyInsurance.com to compare quotes and find the best policy for your needs. Don’t wait until it’s too late—get covered today!
Frequently Asked Questions
Which is better, term or whole life insurance?
Term life insurance is generally better for most people because it has lower premiums and is easier to understand. It provides a specific death benefit for a set term length at a fixed price.
How do I get a life insurance policy?
The best way to get a life insurance policy is by shopping online. This method is faster and more convenient, and the process has become increasingly streamlined in recent years.
What happens to term life insurance if you don’t die?
If you don’t die before your term policy ends, you can either renew the policy at a higher rate, convert it into a whole life policy, or let it expire.
How much is term life insurance for a 50-year-old?
The cost of term life insurance for a 50-year-old varies, but a $250,000 20-year term policy for a woman in excellent health with no exam might cost around $26.42 per month.
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About the author
Sa El
Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 16 years of experience in the industry. He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.
Frequently asked questions
Does E&O insurance cover subcontractors? Usually not automatically. Most E&O policies — especially contractor-focused ones — limit coverage to the named insured’s own employees and officers. Subcontractors should carry their own E&O or professional liability coverage.
What’s the difference between per-claim and aggregate limits? The per-claim limit is the maximum your insurer will pay on any single claim. The aggregate is the total they’ll pay across all claims in a policy year. If you have a $1M/$2M policy, that’s $1M per claim and $2M aggregate.
Can I get E&O insurance if I’ve had a prior claim? Yes, though you’ll typically pay more and may face tighter coverage terms. Full disclosure is required — failing to disclose prior claims when applying can void your policy.
What happens to coverage if I cancel my E&O policy? With a claims-made policy, canceling means you lose coverage for claims filed after cancellation, even for work you’ve already completed. You can buy tail coverage (also called an extended reporting period) to cover claims that come in after the policy ends. This is especially important when you retire, close the business, or switch insurers.
Is E&O insurance tax deductible? Generally yes — business insurance premiums are typically deductible as an ordinary and necessary business expense. Check with your accountant for your specific situation.
Average Cost Of Errors and Omissions Insurance Rates By State Chart
Below is a table summarizing the average cost of Errors and Omissions insurance across various states in the U.S.
StateAverage Annual CostCalifornia$600 - $1,200Georgia$500 - $1,000Texas$550 - $1,100Florida$600 - $1,200
These figures provide a general idea, but actual costs can vary based on specific business needs and risk factors.
How much Is a Indemnity Insurance In Texas
In Texas, the annual cost for small businesses usually falls between $550 and $1,100. For larger firms, the premiums can range from $1,100 to $3,200 or more.
How Much Is Professional Liability Insurance
Professional liability insurance typically runs $500 to $1,000 a year for small businesses, while larger firms can pay $1,000 to $3,000 or more depending on industry and coverage level.
Professional Liability Insurance, another name for Errors and Omissions insurance, typically costs between $500 and $1,000 annually for small businesses. Larger firms might pay from $1,000 to $3,000 or more. The cost depends on the industry, the size of the business, and the level of coverage required.
Is E&O insurance the same as professional liability insurance?
Yes — the terms are interchangeable. “Errors and omissions insurance” is the label more commonly used in tech, consulting, real estate, and financial services. “Professional liability insurance” shows up more often in healthcare, law, and architecture. Same concept, different vocabulary depending on who’s selling it.
No, and this is a really common source of confusion. Here’s a quick breakdown:
| Coverage | What it protects against |
|---|---|
| General Liability (GL) | Physical injury to people, damage to others’ property, advertising injury |
| E&O / Professional Liability | Financial harm caused by your professional mistakes, negligence, or bad advice |
GL won’t help you if a client sues because your software recommendation cost them $200,000. E&O won’t help you if a visitor trips over a cord in your office. Many businesses need both.