Errors and Omissions Insurance What's the Cost?

Errors and Omissions (E&O) insurance is a critical safeguard for professionals and businesses, protecting against claims of negligence or inadequate work. But how much does this essential coverage cost? Let’s break down the factors that influence E&O insurance premiums and give you a clearer picture of what to expect.

Industry and Risk Level

The cost of E&O insurance varies significantly depending on your industry. High-risk professions such as real estate agents, financial advisors, and medical practitioners generally face higher premiums. This is because the potential for costly claims is greater in these fields compared to lower-risk professions like graphic design or consulting.

Coverage Limits

The amount of coverage you choose directly impacts the cost of your E&O insurance. Policies with higher limits, such as $1 million or more, will have higher premiums. Consider your industry standards and potential claim scenarios to determine the appropriate coverage level for your business.


Your deductible—the amount you pay out of pocket before the insurance kicks in—also affects your premium. Higher deductibles usually result in lower premiums, but it's essential to choose a deductible that you can afford in the event of a claim.

Business Size and Revenue

Larger businesses with higher revenues typically face higher E&O insurance costs. This is because more clients and larger projects increase the likelihood of claims. Small businesses or solo practitioners may find lower rates due to their smaller scope of operations.

Claims History

If your business has a history of claims, expect to pay more for E&O insurance. Insurers view businesses with previous claims as higher risk. Maintaining a clean claims history can help keep your premiums lower.

Policy Terms

The specifics of your policy, including the type of coverage and any additional endorsements, will influence the cost. Tailoring your policy to meet your specific needs can help manage costs while ensuring adequate protection.


Your geographic location can affect your E&O insurance premiums. States with higher litigation rates or stricter regulatory environments might lead to higher costs. Be sure to compare rates in your specific region.

Average Costs

On average, small businesses might pay between $500 to $1,000 per year for E&O insurance with a $1 million coverage limit. However, this can vary widely based on the factors mentioned above. High-risk professions could see premiums ranging from $1,500 to $3,000 or more annually.

Understanding the cost of Errors and Omissions insurance involves considering multiple factors, including your industry, coverage limits, deductibles, business size, claims history, policy terms, and location. By assessing these elements, you can find a policy that provides essential protection at a cost that fits your budget. Protecting your business with E&O insurance is a wise investment to safeguard against potential legal and financial repercussions.

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