Errors and Omissions Insurance: What E&O Is, Where to Get It

Errors and omissions insurance protects businesses against claims of mistakes, negligence, misrepresentation and more. Your business should have E&O insurance if it provides services to customers for a fee.

Of the 19 business insurance companies NerdWallet has rated and reviewed, here are our top picks for E&O insurance.

Best E&O insurance companies

Errors and omissions insurance is a common type of coverage that virtually all major commercial insurers offer. NerdWallet recommends getting business insurance quotes from several companies so you can compare costs and coverage details.

If you need coverage quickly, you may be able to buy it from Next in a matter of minutes. And you may be able to get a discount if you buy other policies through the company. However, you can’t buy retroactive coverage online. Read NerdWallet’s review of Next Insurance.

If you need E&O coverage alongside a business owner’s policy, consider buying both from The Hartford, which allows you to get them simultaneously. 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.

E&O insurance policies from Hiscox cover work done all over the world, as long as the claim is filed in the U.S. or Canada. Retroactive coverage, which protects your business against claims arising from the period before you bought your policy, may also be available. You’d need to have had insurance from a different provider at the time of the incident to be potentially eligible. Read NerdWallet’s review of Hiscox business insurance.

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. NerdWallet rates State Farm lower than other providers, in part, because customers have filed a higher-than-expected number of complaints with state regulators. But the company still came in second place in the customer satisfaction ratings in J.D. Power's 2024 U.S. Small Commercial Insurance Study. Read NerdWallet’s review of State Farm business insurance.

How E&O insurance works

E&O insurance protects your business finances if you're accused of errors or oversights, failure to deliver a service, breach of contract, professional negligence or failure to meet a standard of care.

It can pay out to cover:

In general, errors and omissions insurance policies are claims-made policies. That 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. Buy a policy as soon as you start serving clients to ensure your business is protected.

Already operating? 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. Online quote flows may not allow you to buy retroactive coverage, so reach out to an insurance agent for support.

Errors and omissions insurance is a kind of professional liability insurance. The two terms are used interchangeably in some industries.

» MORE: General liability vs. professional liability: What’s the difference?

What doesn’t E&O insurance cover?

E&O insurance generally does not cover:

• Illegal acts.

• Purposeful wrongdoing.

• Bodily injury your business causes (general liability insurance typically covers that).

• Property damage your business causes.

• Data leaks (cyber liability insurance typically covers that).

• Employee injuries or illnesses (workers' compensation insurance typically covers that).

• Discrimination or harassment claims from employees (employment practices liability insurance typically covers that).

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:

• Accounting.

• Architecture.

• Financial and investment advising.

• Insurance.

• IT consulting.

• Real estate.

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.

Even if it’s not legally required, clients may ask for proof that you have E&O insurance and decline to work with you if you don’t provide a certificate of business insurance.

» MORE: Do consultants need professional liability insurance?

How much does errors and omissions insurance cost?

The cost of E&O insurance can vary widely depending on:

• Whether you’re in a high-risk industry.

• How much coverage you want.

• Whether there's a history of liability claims against your business.

• Where you do business.

• Number of employees.

Online brokerage Coverdash says that, for businesses with less than $1 million in annual revenue, premiums generally fall into these ranges:

• Professional, scientific and technical services: $800-$3,500 per year.

• Technology: $1,300-$2,400 per year.

• Construction (contractors E&O insurance): $1,200-$5,000 per year.

And The Hartford says its average customer pays $76 per month, or $912 per year, for E&O insurance.

To find out how much business insurance will cost for your company, get quotes from several insurance providers.