Errors and Omissions Insurance Cost: Average Rates & What Drives Them

Errors and omissions insurance pays for the defense and damages when a client says your professional work was wrong, late, or incomplete. Insurers also sell it as professional liability, and the two names usually describe the same coverage. Consultants, accountants, real estate agents, IT firms, and other service businesses are the usual buyers, because their product is advice or work performed for a client rather than a physical item.

The price depends mostly on what you do for clients and how much a mistake could cost them. This guide shows published averages by source, by profession, and by business size, and explains why the numbers differ.

Three sources report an average monthly premium. They do not agree, and the reasons are in the next section.

The sources measure different groups of businesses in different ways.

• Insureon reports the median of policies its own customers bought. Those customers are mostly very small firms, and the figure is for professional liability across all industries.
• MoneyGeek studied industries that use the E&O name and modeled the rate for a small business with a standard policy.
• The Hartford reports the average its own standalone professional liability customers pay.

Because each source starts from a different pool of customers, the averages describe different populations. A figure for a consultant is not the figure for a financial advisor, even when both are called E&O. The range in the headline covers where the large majority of small businesses fall, while individual professions can sit well outside it.

Risk is tied to the work. A notary signs documents, while a property manager handles leases, maintenance, and tenant disputes, so the exposure differs.

The spread in this table is wide. Professions where an error can lead to a large financial loss for the client tend to price higher. Lower-risk activities with narrow duties price lower. If your work does not appear here, the nearest comparison is a profession with similar client exposure.

Adding people adds opportunities for mistakes, so premiums rise with headcount.

A sole proprietor sits at the bottom of the scale. The increase from a solo owner to a team is steady rather than sharp, and larger firms with more clients and more projects pay more.

• Profession and services offered. The type of advice you give and the financial stakes for your clients matter most.
• Policy limits. Many small-business policies come with a per-claim limit and an aggregate limit. Higher limits cost more.
• Deductible. A larger deductible lowers the premium and raises your share of a claim.
• Revenue and client contracts. Higher revenue and contracts that require specific limits push the price up.
• Claims history. Prior claims raise rates.
• Retroactive date. E&O policies are written on a claims-made basis, meaning coverage applies to claims made while the policy is active. A policy that keeps an earlier retroactive date can cost differently than a brand-new one.

E&O generally responds to allegations of negligence, mistakes, and missed deadlines in professional services. It does not usually respond to bodily injury or damage to someone's property, which general liability handles. Fraud and intentional acts are typically excluded. Exact terms differ by policy, so reading the declarations page and exclusions matters as much as comparing price.

• Is the policy claims-made, and what retroactive date applies?
• What do the per-claim and aggregate limits look like, and do defense costs reduce them?
• What is the deductible?
• Are there extended reporting options if you close the business or switch carriers?
• Does the contract with your client require a particular limit or additional insured status?

Your insurance agent or broker can walk through the policy terms for your profession.