Errors and Omissions (E&O) Insurance

Most businesses that provide a service or offer professional advice can benefit from an E&O policy.

Common business types that purchase a policy from NEXT Insurance include: 

• Insurance agents
• Real estate agents
• Architects and engineers
• Property managers

It’s important to include E&O insurance in your business insurance package to make sure you are protected from risks you could be exposed to while making business decisions with your clients, customers or business partners. 

For example, E&O can cover costs up to your policy limit if:

• A customer says you made a mistake that caused financial harm.
• You miss a deadline while providing a service that negatively impacted your client.
• Someone claims that they lost money because you were negligent in providing business services.

Here are some other benefits of errors and omissions insurance:

When you have errors and omissions insurance, you’re letting your clients know that they will be protected if you make a mistake that financially hurts their business.

For many professions, E&O insurance could be required to get a professional certificate or license, or your clients might ask you to have coverage before they sign a contract with you. 

For example, a real estate agent might need to purchase a real estate E&O policy and provide a certificate of insurance before signing on with a broker. Insurance agents often need to have coverage before they can work with an insurance carrier or agency.

Business disagreements can escalate into legal actions. If your business is accused of professional negligence or making a mistake that causes financial harm, your errors and omissions coverage can help you pay for related expenses until you reach your policy limit. 

For example, if there is a fire in an apartment building, a tenant could file a professional negligence lawsuit that claims the property manager did not properly inspect smoke detectors.

Some other areas where errors and omissions insurance can provide coverage, include:

• Disciplinary proceedings – Costs to defend yourself in cases brought against you by a professional review board or licensing organization.
• Crisis management – Expenses for retaining a public relations firm after an accusation of professional negligence.
• Subpoena assistance – Costs to produce documents and testify in response to a subpoena.

E&O business insurance (also known as professional liability insurance) helps pay for lawsuit costs and damages if your company is accused of work errors or incomplete projects that cause a client to lose money.

E&O can help pay for:

• Professional negligence (actual or alleged)
• Legal defense costs
• Legal judgments

Learn more about what E&O covers.

Errors and omissions insurance and professional liability insurance both offer the same coverage. The only difference is that some industries commonly use the term “E&O insurance” — including tech professionals, real estate agents, and insurance agents.

Professions that call the coverage “professional liability insurance” include accountants, lawyers, architects and engineers, and other businesses.

Bottom line: whether you call it errors and omissions insurance or professional liability insurance, you can get customized coverage and proof of insurance for your business in a matter of minutes with Next Insurance.

E&O insurance starts at $19 a month but may vary based on your coverage needs, your exposure to risk and your claims history.

The cost of your errors and omissions insurance monthly premium is determined by several factors involving your business operations, including:

Your exposure to risk
Businesses with more exposure to risk typically pay higher rates for E&O insurance than low-risk businesses. If your business is part of a field where a mistake is considered major and costly, you will likely pay more than if a mistake can be easily fixed at less cost.

Your claims and insurance history
Having a history of insurance claims, canceling your policies early, and other related factors can lead to higher business insurance rates.

Your coverage limits and insurance package
If you want more insurance coverage, you’ll have to pay more for higher coverage limits — the amount you or someone else would receive after a claim. When you get an instant quote online with NEXT Insurance, you will typically receive two or three options with our coverage recommendations.

Choose the option that works best for your coverage needs and your budget. You can save 10% on insurance costs by bundling your E&O coverage with another policy, such as general liability, workers’ compensation or commercial auto insurance.

When you are ready to purchase your policy you can choose an E&O insurance monthly premium or annual payment options.

With NEXT Insurance, you can purchase errors and omissions coverage online and get your certificate of insurance 10 minutes, or less. 

Start an instant quote to see options for your business. Here’s how the process works:

We’ll ask you some basic questions about your business and operations, including: 

• Your industry
• Where you do business
• How many years you have owned the business
• Number of employees
• Expected annual revenue
• Recent insurance and claims history

After you share your information, you’ll have instant access to a customized insurance quote for E&O and other recommended coverage. 

If you like what you see, you can adjust the package limits and make your purchase. Your insurance will begin immediately after payment, and you’ll have access to your certificate of insurance.

Start a free instant quote today.

Learn about E&O insurance with more frequently asked questions about our coverage.

If you don’t find the answers you’re looking for, our licensed insurance advisors are standing by to help.

When you’re ready to explore coverage options for your business, you can get an instant quote online and purchase insurance within a few minutes.

What are the main differences between E&O and Professional Liability insurance? How do I know which one to choose?

Errors and omissions (E&O) insurance and professional liability insurance provide the same coverage.

There are many terms for this type of insurance mainly because each industry is different and has unique types of professional mistakes that need to be covered.

In general, E&O insurance is used when describing this coverage for professions such as real estate and insurance professions. Professional liability insurance is used when describing accountants, consultants, engineers and architects.

Here are some instances in which you might need E&O insurance for your business:

• The owner of a property claims that you made repeated mistakes on the paperwork for transitions between tenants that cost him $50,000 and he wants to be reimbursed.

• You forgot to inform a client of the deadline to renew a personal auto insurance policy. A day after the policy expires, the client crashes into another car, causing significant damage.

• A former client sues you, claiming professional negligence that has led to financial damages. Even though the suit is without merit, you must respond to any subpoena requests, prepare a defense and potentially appear in court.

Does E&O insurance cover my subcontractors or employees?

Your employees are covered by your E&O policy but only for the professional services they deliver for your business.

For example, you own a real estate business and one of your employees sells a house with high radon gas exposure. They would be covered if the person who buys the house decides to sue for failing to disclose this defect.

Your contractors may be covered but it depends on the details of your specific policy. Check the “Who is an insured” section of the “Definitions” part of your policy to make sure.

Is E&O insurance legally required?

E&O insurance is typically not required for your business but there are some variations depending on what state you live in and what industry you’re in.

If you’re a realtor who sells expensive office buildings your risks are high and your clients may require you to carry insurance in order to provide financial protection in case of a lawsuit.

If you’re unsure if it’s a legal requirement in your state, you can call one of our U.S.-based, licensed insurance professionals at 855-222-5919 or email us at support@nextinsurance.com to help determine the type and amount of coverage you need.

If I already have General Liability insurance can I add E&O insurance as a package deal?

Yes, we offer up to a 10% discount when you add an E&O policy to your general liability insurance policy or any other existing policy.

You can add E&O insurance directly through your online customer account. Or you can call us at 855-222-5919 or email us at support@nextinsurance.com.

Do real estate brokers need to carry E&O insurance?

The rules for real estate brokers vary across the different states. Real estate E&O insurance is required in these states:

• Alaska
• Colorado
• Iowa
• Idaho
• Kentucky
• Louisiana
• Mississippi
• Montana
• Nebraska
• New Mexico
• North Dakota
• Rhode Island
• South Dakota
• Tennessee

Even if you don’t work in one of these states, however, E&O insurance can help your business. Commercial and residential properties are expensive transactions and the potential for disagreements turning into legal actions are higher than in other professions.

If you do face legal trouble, E&O insurance can help pay for your defense fees and judgments (up to your policy limits).

Will E&O insurance cover me if it’s my fault?

Errors and omissions insurance is designed to provide coverage for your mistakes, even if you are at fault. Unintentional negligence, or honest mistakes on your part, is why E&O policies exist.

Note: You will not be covered for intentional or criminal acts.

Do you offer prior acts coverage?

Depending on your industry, we may provide prior acts coverage for businesses that have maintained continuous E&O coverage at similar or higher limits since the requested retroactive date.

This means that if you first report an E&O claim related to negligent acts in the past you can still receive coverage from NEXT.

Can I add an additional insured to my E&O policy?

All NEXT policies include the ability to automatically add an additional insured.

If you have a contract in place with another person or company requiring you to list them as an additional insured on your insurance policy, they are automatically covered under your NEXT policy.

Depending on your industry, you can also add a specific person or company to your Certificate of Insurance by clicking “Share proof of insurance” from your online customer account.

You’ll be asked if you need a general proof of insurance or one with a venue or client as additional insured. As soon as you input the details of the additional insured, you can add their email address and we’ll send them over the certificate for you.

Any person or company that you add to your policy is referred to as an additional insured. They are named on your certificate, and only have a certificate if you send them either a physical or electronic copy of the certificate.

Will my premium change or my policy be cancelled if I file a claim?

No, we won’t alter your premium during the term of an active policy or cancel your coverage due to a claim. We understand that filing a claim is stressful enough without having to worry about it affecting your premium.

At the end of your policy period, however, we will review the details of your business and claims activity. If either has changed since you first applied, we’ll adjust the premium up or down.

How do I file an E&O claim?

If you are a NEXT customer, you can file a claim with your account online.

After we receive your claim, we will call you to get additional details. You are also welcome to call us to report a claim: 855-222-5919.

If you are not a NEXT customer, you can report a claim in our help center or call us.

It’s important to file E&O claims and potential claims as soon as possible, as E&O is typically claims-made coverage. This means you’ll have financial protection for incidents during the active policy period and a retroactive start date. The claim must be made during the coverage period.