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What is the cost of Errors and Omissions Insurance?

errors and omissions insurance Arizona

Errors and Omissions Insurance or Professional Liability insurance protects business owners in the event they are alleged to have provided inadequate services or designs to a client. Errors and Omissions Insurance or E&O Insurance provides coverage to cover the legal cost and expenses in defending the claim as well as payment to the claimant to rectify the situation.  However, this coverage does not cover criminal prosecution and is different from General Liability Insurance as it covers losses that are of an economic nature instead of bodily injury and property damage. E&O insurance policies are on a claims-made basis, meaning that policy only covers claims made during the policy period.

Errors and Omissions Insurance
Errors and Omissions Insurance


Professional Liability Insurance may take on different forms and names depending on the profession. Doctors, for example, carry Malpractice Insurance, while Errors and Omissions Insurance is used by insurance agents, consultations brokers, and lawyers.  Professional Errors that you could get sued for:

  • Oversights and errors.
  • Undelivered services.
  • Services that don’t live up to industry standards.


Professional Liability Insurance can cover mistakes made by your employees as well.

For small-business owners who offer specialized services or products, this type of insurance is important, and some industries even require that you carry it. Depending on the type of business that you are in, your state or local government may require it or private companies may require you to have it as well.  Similarly, as a business owner, you may request your subcontractors to carry their professional liability coverage.  One of the best places to begin researching professional liability insurance is within your association or trade group.  Not only will association members have experience in this area as a member you may qualify for coverage at a favorable cost.  You could also talk with an insurance agent like Blake Insurance a commercial insurance agency offering specialized coverages like errors and omissions insurance, employment practices liability, and cyber liability insurance as well.

cost of errors and omissions insurance
cost of errors and omissions insurance

What is the cost of E&O Insurance?

The cost associated with Professional Liability Insurance depends largely on the business’s industry, size, and day-to-day operations. The two biggest factors that impact price would be policy limits and the business’s industry. Two limits come with Errors and  Omissions insurance policy, Occurrence, and Aggregate. The occurrence is the max amount an insurer will pay for any one claim made during the policy year, and Aggregate is the max amount an insurer will pay in claims for the policy year. The higher the limits are, the more the premium will be for the policy.