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Errors and omissions insurance cost
The cost of errors and omissions insurance (E&O), also called professional liability coverage, varies based on a number of factors about your business. Your premium is directly impacted by your industry, the type of work you do, your location, and more.
What is the average cost of errors and omissions insurance?
Small businesses pay an average premium of $61 per month, or about $735 annually, for errors and omissions insurance.
Our figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies.
The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
Typical errors & omissions insurance costs for Insureon customers
While Insureon's small business customers pay an average of $61 monthly for errors and omissions insurance, 32% pay less than $50 per month for their policies, and another 39% pay between $50 and $100.
The cost varies for small businesses depending on their types of risks and the coverage they choose.
How is the cost of errors and omissions insurance calculated?
Multiple factors impact how much your E&O insurance policy costs, including your business size, previous liability claims, location, and policy limits.
How do policy limits affect errors and omissions insurance costs?
If you want an errors and omissions insurance policy that covers more expensive lawsuits, you’ll need higher limits – which means you’ll pay a higher price.
The limits on E&O coverage vary significantly, from $250,000 to $2 million. Errors and omissions coverage with $1 million / $1 million limits is the most popular option for small businesses. This includes:
- $1 million per-occurrence limit. While the policy is active, the insurance company will pay up to $1 million to cover any single claim.
- $1 million aggregate limit. During the lifetime of the policy, the insurer will pay up to $1 million to cover E&O claims.
The majority of Insureon customers (63%) choose an E&O insurance policy with $1 million / $1 million limits. Nine percent of our customers choose an E&O policy with $2 million / $2 million coverage limits, the next most popular choice.
When buying a policy, it's a good idea to make sure the deductible is something you can easily afford. If you can’t pay for it in a crisis, your insurance won’t activate to cover your claim. The average deductible that Insureon customers select for errors and omissions insurance is $2,500.
The right amount of errors and omissions insurance coverage depends on your business needs. You want coverage that'll cover a potential lawsuit, without buying more than you need. Chat with a licensed insurance agent if you're unsure which limits are right for your business.
How does your industry impact the cost of E&O insurance?
Our analysis of errors and omissions insurance costs reveals that for small businesses, your industry has the biggest impact on your premium. Generally, insurance providers charge higher-risk businesses higher premiums, while lower-risk industries enjoy lower rates.
For example, building design professionals, such as architects and engineers, are exposed to more risk than photographers or accountants. A mistake could lead to problems with the stability of a building, or cause an injury if a structure collapses.
Depending on your state and your profession, you may need E&O coverage to get licensed or to work in your field. That can include realtors, insurance agents, lawyers, and doctors.
Some professional service providers, such as notaries, are rarely required by their state to carry E&O, but they should consider it anyway to protect against lawsuits.
The graph below illustrates how your type of business affects what you'll pay for an errors and omissions insurance policy.
Top industries we insure
To see insurance costs for businesses in your industry, visit our industry-specific cost analyses.
Don't see your industry? Don't worry. We insure most businesses.
What other factors impact E&O insurance costs?
While policy limits and industry are important factors in determining your policy costs, insurance companies will also use the following factors to determine your E&O insurance coverage costs:
- Claims history - A claims history may indicate to insurance companies that your business is a higher risk, which could increase your costs. Focusing on good documentation practices, risk management, and employee training can help prevent claims.
- Deductible - Your deductible is the amount you'll need to pay out of pocket before your insurance kicks in. A higher deductible generally means a lower premium.
- Cyber risks - A higher potential for data breaches or cyber attacks could increase your insurance rates.
- Number of employees - Your business size and the amount of people in your employ could have an impact on your insurance costs.
Your location may also have an effect on your insurance prices, as evidenced by the following table which showcases the average policy costs for Insureon customers based on their state:
| State | Professional liability insurance cost |
|---|---|
$82 per month | |
$71 per month | |
$71 per month | |
$83 per month | |
$78 per month | |
$67 per month | |
$72 per month | |
$70 per month | |
$62 per month | |
$63 per month |
E&O insurance provides affordable, necessary protection for professional services
Errors and omissions insurance is a must-have for small businesses that provide expert advice or services, such as IT consultants or professional services. You may see it referred to as professional liability insurance or malpractice insurance depending on the industry.
Experts can still make mistakes or oversights, or give professional advice that causes financial loss for a client. If the client sues, attorney’s fees, court costs, and other legal costs can escalate to the point where they could sink your business.
Even if you've done nothing wrong, you're not immune to lawsuits. For example, your business could lose a key individual who you need to complete a project on time, or a client could sue over a budget overrun that was out of your hands.
When someone sues your business – even if it's a frivolous lawsuit – you'll have to pay legal defense costs, including the cost of hiring an attorney. If you lose the suit, you could end up paying a fortune in a court-ordered judgment or a settlement.
Errors and omissions insurance covers all of these costs, which could save your business from bankruptcy. Because the premium is based upon your level of risk and your industry, many small businesses pay only a small monthly premium for this coverage.
How can you save money on E&O insurance?
It's possible to reduce your E&O premium through a few simple steps:
Shop around. Insurance companies offer a range of errors and omissions premiums and coverages. Compare quotes from different carriers with Insureon's easy online application.
Pay your entire premium upfront. Policyholders can choose to pay insurance premiums once a month or once a year. While making a smaller payment each month requires less money up front, it may cost more in the long run. Insurers often offer discounts to businesses that pay an annual premium.
Bundle policies. Depending on your industry, it's sometimes possible to bundle errors and omissions insurance with another policy, such as general liability insurance. For example, tech professionals can buy E&O insurance and third-party cyber liability insurance together in a bundle called tech E&O. This often costs less than purchasing each policy separately.
Keep continuous coverage. Continuous coverage is key if you don't want to pay out of pocket for E&O lawsuits. While it’s possible to purchase coverage when you start a project and drop coverage when you complete the project, this cost-cutting strategy can backfire for errors and omissions and other claims-made policies. To file a liability claim, your insurance must be active:
- When an alleged mistake occurs
- When the claim is filed
Reduce your risks. Your errors and omissions claims history is a big factor when calculating your premium, which is why it's important to avoid lawsuits in the first place. Many errors and omissions lawsuits stem from client disputes. To reduce the risk of hefty legal fees, you can:
- Strive to meet the standard of care for your industry
- Communicate clearly, especially when an issue arises
- Document all contracts and communications with clients
Why do small business owners choose Insureon?
Insureon is the #1 independent agency for online delivery of small business insurance. We help business owners find peace of mind by comparing quotes from top-rated providers, buying policies, and managing coverage online.
By completing Insureon’s easy online application today, you can get free errors and omissions insurance quotes from top-rated U.S. insurance companies. Our licensed insurance agents can also answer any questions you have about other types of insurance as well.
Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance for your small business.
For more information about E&O insurance coverage, visit our frequently asked questions (FAQ) about E&O.
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Learn more about business insurance costs
Insurance premiums vary based on the policies a business buys. See our small business insurance cost overview or explore costs for a specific policy.
Updated: March 26, 2025