Errors and Omissions (E&O) Insurance

If you make an error, we’ll make it better. Check Prices

A small business disagreement can quickly turn into a big problem. Get E&O coverage that protects you from unexpected expenses.

Business mistakes

You didn’t disclose a defect in a major real estate sale.

Accusations of negligence

A promising stock tanks, wiping out your client’s investment.

Missed deadlines

You forgot to renew a client’s car policy & they get in an accident.

What is Professional Liability E&O insurance?

What is Errors and Omissions insurance?

An errors and omissions insurance policy, also known as professional liability insurance, provides financial protection for you and your business if you are accused of making a mistake, professional negligence or not delivering on business agreements. 


Regardless of whether an accusation is warranted or not, it will take time and financial resources for you to respond. Small business errors and omissions (E&O) insurance can provide coverage for associated costs up to your policy limit, helping you to avoid disruptions to your business and out-of-pocket expenses.

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Who needs errors and omissions insurance

Who needs Errors and Omissions 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 and brokers
  • Home inspectors
  • Property managers
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Why is it important

Why is it important?

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:


E&O insurance can help you get more clients

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.


You might be required to have E&O coverage for contracts and certifications

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.


E&O can cover costs to defend your business

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.
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What does it cover

What does Errors and Omissions insurance cover?

E&O insurance can help cover expenses if you are accused of making a mistake, missing a deadline or causing a financial loss while providing business services.

There are three core areas where errors and omissions insurance can protect you from unexpected costs:

Your business mistakes

You can make all the right moves at your business, but mistakes are still not 100% avoidable. After you pay your deductible, E&O insurance can protect you from out-of-pocket costs until you reach your policy limit if you or your employees are accused of making a mistake that causes financial harm to another person or business.


Example: In the excitement of closing a deal on a prime piece of property, a real estate agent forgets to disclose a defect with the home’s siding that will cost $20,000 to fix. The person who purchased the home could file a lawsuit against the agent. The agent’s E&O coverage would cover some expenses up to the policy limit. 

Accusations of professional negligence

When you provide professional services, you are expected to act in the best interest of your clients. Lawyers call this “duty of care.” If your business actions lead to financial harm, you could be accused of professional negligence and forced to defend yourself. 

Your E&O policy would cover related expenses up to the limits of your policy, including your lawyer and legal fees and judgments if you are ruled liable for your client’s losses.


Example: A hot new company’s stock is about to hit the market. It’s generating a lot of buzz, even though it’s known to be a potentially volatile option. A financial advisor goes all in with a client’s investments, even though the client prefers a more conservative and balanced approach. A day later, the stock tanks and 80% of the investment is wiped out.

The client could have grounds for legal action against the advisor. The advisor’s E&O coverage would pay for defense expenses up to the policy limits.


Missed deadlines

Depending on your industry, deadlines can make or break a business. If you miss a deadline on a project that causes significant financial losses for your client, you could be asked (or forced) to pay for the damages. Your E&O policy would cover expenses up to your policy limits.


Example: Business is booming for an insurance agent — so much so that he 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. Since the policy is no longer active, the claim is denied, and the client decides to sue the agent to recoup expenses for the damages. The agent’s E&O insurance policy would cover the costs up to the policy limit.

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what doesn't it cover

What is not covered by an E&O policy?

E&O insurance provides important coverage, but you’ll need to explore other policies to make sure you are protected from all the risks your business faces. We also offer coverage for business-related injuries, damage to another person’s property, business driving, and more. 


Read your policy documents carefully so you understand what is and is not covered with E&O insurance for your business.


Next Insurance E&O policies provide coverage on a “claims-made basis.” It’s an old-school insurance industry term that basically means you are covered only for claims reported during the policy period — the first date your policy is active until your coverage ends.


Client injuries and property damage

General liability insurance covers the most common accidents that can cause non-employee injuries or damage to property that does not belong to you. For example, it can cover medical expenses after a slip-and-fall accident or repair/replacement costs if you or an employee damage a client’s property.

Employee injuries and illnesses

Workers’ comp insurance can cover medical expenses, lost wages, and employer liability if one of your employees is injured or becomes ill while working for your business. It is required for businesses with employees in most states.

Business transportation

Most states require a commercial auto insurance policy for business-owned vehicles. Even if it’s not required in your state, commercial auto provides protection for accidents that occur while driving for your business that are not often covered by a personal auto insurance policy.

Your E&O policy also won’t cover:

Business property

E&O policies are designed to protect you from losses from your professional mistakes. Any damage to your business property and equipment or business interruption losses are not covered.

Claims made outside your policy period

Report any E&O claims or potential claims as soon as possible. Since E&O insurance is a claims-made policy, you are only covered or claims reported during the policy period (the time your policy is active).

Employment Disputes

Errors and omissions insurance covers professional mistakes made by your employees or you, but it does not cover claims made against you as their employer. If a former employee sues you for discrimination or wrongful termination, E&O insurance cannot help you. You will likely need employment practices liability insurance. 

Intentional wrongdoing and illegal activity

Mistakes happen, and your E&O policy will cover many of them. However, if you or an employee purposely make work-related decisions that cause financial or physical damages, you might not have coverage. To avoid this, get legal advice from a professional to make sure you comply with rules and regulations wherever you do business.

False advertising

If you intentionally advertise false information about your business, your product, or your credentials and you are sued, you won’t be able to fall back on your E&O insurance for help. Make sure that you are transparent and truthful with all public-facing information.

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How is E&O insurance different from professional liability?

How is E&O different from professional liability?

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.

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How much does it cost?

How much does Errors and Omissions insurance cost?

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.

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How to get insured

How do I get E&O insurance?

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.


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Some sage advice if you give advice for a living

Whether you’re an insurance agent, real estate broker, notary or financial advisor, if you’re giving out guidance, get E&O insurance.

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Find the coverage you need, all in one place

With Next Insurance, you’ll find tailored coverage to fit your small business needs. Plus, save up to 10% when you sign up for more than one policy. Win-win. (Note: Coverage and discount eligibility varies from state to state.)