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Errors and Omissions Insurance Cost

Updated 03:26 PM EST, Mon November 2, 2020

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What Is Errors and Omissions Insurance?

You put a lot of effort, focus and energy into running your business well, but mistakes can happen. Luckily, professional liability insurance, also known as errors and omissions insurance or E&O coverage, can help.
 
E&O coverage helps protect your company from lawsuits that claim you made mistakes or omissions in your professional services. If a client or customer sues you, this coverage can help pay your defense costs and legal settlements. 
 
The cost of errors and omissions coverage varies from one company to another, but it’s a small price to pay to protect the business you’ve worked so hard to build.
 
 
 

How Much Does Errors and Omissions (E&O) Insurance Cost?

Errors and omissions costs can depend on a variety of factors, such as your: 
 
  • Business size, because depending on your number of employees, you may have higher risks. Small businesses typically have fewer employees and lower rates.
  • Revenue, because more money can come with a higher risk of lawsuits.   
  • Industry and the types of risks you face. For example, a construction company may have a higher than average errors and omissions rate because their mistakes can result in property damage.
  • Employee training, because teaching your employees how to reduce risk can lower your insurance rate.
  • Contracts, because depending on how they’re written, they can either increase or decrease your exposure to liability.
  • Location, especially if you’re in a state with higher minimum coverage requirements.
  • Claims history, because you can expect to pay higher E&O insurance rates if you have a history of lawsuits.
  • Coverage limits, because policies with a higher limit are likely to cost more than policies with lower coverage limits.
It’s a good idea for business owners to have a Business Owner’s Policy (BOP). This helps you get the protection of three essential coverages, all in one policy:
 
  • Commercial property insurance
  • General liability insurance
  • Business income insurance
To get even more additional coverages, you can add extra layers of protection to your BOP, like:
 
  • Data breach insurance
  • Professional liability or E&O insurance
  • Workers’ compensation insurance
Bundling your policies is more affordable than buying each one separately, and you can customize your BOP to fit your business’ specific needs.
 

Examples of How Much Errors and Omissions Insurance Costs

Average costs for E&O coverage are usually $500 to $1,000 per employee, per year. So, if your business has 50 employees, you can estimate your errors and omissions premium to be between $25,000 and $50,000 per year. This is only an estimate. Don’t forget that other factors, like location, type of business and claims history will determine your actual rate.
 
You can get a quote through trusted insurance companies, like The Hartford. We’re here to answer your questions and walk you through what each type of business insurance covers. From there, we’ll help you determine exactly what you need and give you a total for your unique business insurance costs.
 

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The Hartford shall not be liable for any damages in connection with the use of any information provided on this page. Please consult with your insurance agent/broker or insurance company to determine specific coverage needs as this information is intended to be educational in nature.
 
The information contained on this page should not be construed as specific legal, HR, financial, or insurance advice and is not a guarantee of coverage. In the event of a loss or claim, coverage determinations will be subject to the policy language, and any potential claim payment will be determined following a claim investigation.
 
Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In Arizona, New Hampshire, Washington and California, the insurance is underwritten by Hartford Accident and Indemnity Company, Hartford Casualty Insurance Company, Hartford Fire Insurance Company, Hartford Insurance Company of Illinois, Hartford Insurance Company of the Midwest, Hartford Lloyd’s Insurance Company, Hartford Underwriters Insurance Company, Maxum Casualty Insurance Company, Maxum Indemnity Company, Navigators Insurance Company, Navigators Specialty Insurance Company, Pacific Insurance Company, Property and Casualty Insurance Company of Hartford, Sentinel Insurance Company, Ltd., Trumbull Insurance Company and Twin City Fire Insurance Company. The Hartford® is The Hartford Financial Services Group, Inc. and its subsidiaries, including Hartford Fire Insurance Company.
 
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.
 
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