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Errors and Omissions Insurance: What E&O Coverage Is, Where to Get It
Making a mistake, or just being accused of one, can create legal problems. Errors and omissions insurance may help.
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
⏰ Estimated read time: 6 minutes
Errors and omissions insurance, also called E&O insurance, protects businesses against claims of mistakes, negligence, inadequate work, inaccuracies, misrepresentation or similar allegations.
Your business should have E&O insurance if it provides services to customers for a fee.
Tivly works with over 200 insurance providers, matching you to the one who fits your needs!
Errors and omissions insurance is a common type of coverage that all major commercial insurers offer. Start your search with these companies.
Best for: Getting a quote and buying an E&O policy online in minutes.
If you need coverage quickly, you may be able to buy it from Next in a matter of minutes. Next’s E&O insurance policies start at $19 per month, and you may be able to get a discount if you buy other policies through the company. Read NerdWallet’s review of Next Insurance.
Best for: Adding E&O coverage to a business owner’s policy.
If you need E&O coverage alongside a business owner’s policy, consider buying both from The Hartford, which allows you to tack E&O coverage onto a BOP. You can get an E&O insurance quote from The Hartford online, but you may have to talk to someone on the phone to complete your purchase. Read NerdWallet’s review of The Hartford business insurance.
Best for: Working with an insurance agent.
If you want a professional to handle your business insurance for you, you can enter your ZIP code on State Farm’s website and a local agent will contact you. That agent can help you get a quote and purchase E&O insurance, among other policies. State Farm earned a lower star rating from NerdWallet than other providers because customers have filed a higher-than-expected number of complaints with state regulators — but the company topped the customer satisfaction ratings in J.D. Power's 2022 U.S. Small Commercial Insurance Study
NerdWallet recommends getting business insurance quotes from several companies so you can compare costs and coverage details.
🤓 Nerdy Tip
If you need insurance for a home-based business, note that you can’t get errors and omissions insurance under homeowners insurance endorsements or in-home business policies. You’ll need to buy a separate policy.
What does errors and omissions insurance cover?
If someone files a lawsuit against your business, E&O insurance can pay out to cover:
Legal and court costs. This includes attorney fees and other costs a business must pay to deal with a covered claim, whether or not the legal system finds you at fault.
Settlements or judgments owed. If the business owner is found to be at fault, errors and omissions insurance can help with these payments.
Damages and expenses. Your business might have to pay these if it infringes on someone else’s copyright, for instance.
Some E&O policies will even cover work done outside of the country.
In general, errors and omissions insurance policies are claims-made policies, which means coverage must be in place at the time a claim is made in order for the insurer to cover it. If your coverage lapses, you’ll no longer be protected.
E&O insurance policies can be retroactive to a specific date defined in the policy. That means they’ll cover claims of alleged mistakes dating back to that point, but not before.
Who needs errors and omissions insurance?
If you provide professional services to customers for a fee, you should have some form of errors and omissions insurance.
Those professions might include:
Financial and investment advising.
Some professionals are required to carry E&O insurance, whether it’s by law, licensing boards or professional associations. For example, Tennessee and Rhode Island both require real estate agents to have E&O policies in place in order to be licensed.
Businesses that provide services to customers for a fee likely need errors and omissions insurance or another kind of professional liability insurance. Some of your clients, business partners or licensing boards might also require you to have E&O insurance.
Claims against your business may not be covered. Errors and omissions insurance is typically “claims-made,” which means the policy has to be in effect when the event took place and when a lawsuit is filed in order for the insurer to pay the claim.
Often, professional liability insurance is simply another term for errors and omissions insurance. Which term is used typically varies by industry. For example, legal and medical malpractice insurance are unique types of professional liability insurance.
Business insurance ratings methodology
NerdWallet’s business insurance ratings reward companies that offer small-business owners reliability and ease of use. Ratings are based on weighted averages of scores in several categories, including financial strength, customer complaint data, shopping experience and customer service. Learn more about how we rate small-business insurance companies.
These ratings are a guide, but insurance policy details and prices can vary widely from business to business and provider to provider. We encourage you to shop around and compare several insurance quotes.
NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2021.
To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period.
Our star ratings consider ratios for both general liability insurance and commercial property insurance. When an insurer sells policies that are underwritten by several different insurance companies, we consider the NAIC complaint ratios of all the underwriters.