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E&O Insurance Cost for Different Professionals (2022 Rates)

Errors and omissions insurance is also known as professional liability insurance. E&O provides protection against claims of negligence or mistakes made against you by clients. How much errors and omissions (E&O) insurance costs varies by profession due to the types of liabilities each profession is exposed to. Any profession that gives advice or provides a service should consider E&O insurance. 

How Much does E&O Insurance Cost?

On average, E&O insurance costs $720 – $3,000 a year or $60 – $250 a month. It varies by professions and a few other factors related to the E&O policy such as the maximum coverage amount, which is usually $1,000,000 and the deductibles. The higher the deductibles are, the cheaper the premiums of the policy are.

The table below gives you a sense of how much, on average, E&O insurance costs by professions.

Profession Average annual costRelated Articles
Architects and engineers$1,750Top 5 Providers of Professional Liability Insurance for Architects and Engineers
Financial professionals$400Professional Liability Insurance (E&O) for Consultants, Investment Advisors, and Other Financial Professionals
Home Inspectors$900Home Inspector E&O Insurance: Cost and Top 4 Providers
Appraisers$720Appraiser E&O Insurance: Cost and Top 5 Providers
Notaries$720Notary E&O Insurance: Cost and Top 4 Providers
Insurance Agents$720E&O Insurance for Insurance Agents: Cost and Top 5 Providers
Tech professionals$750Professional Liability Insurance (E&O) for IT Professionals

How much is the average E&O insurance cost per month for different professionals?

E&O insurance cost varies by professions since the risk exposure for each profession is different from one another. Below is the average E&O insurance cost for different professionals in different industries:

Profession Average costs
Architects and engineers$146 per month
Financial professionals$33 per month
Home Inspectors$75 per month
Appraisers$60 per month
Notaries$60 per month
Insurance Agents$60 per month
Tech professionals$63 per month

Please note that these are median averages. The amount someone pays for E&O insurance will vary depending on several factors that we are discussing in details below.

In other words, you may pay a different amount. Different insurance companies always have different prices or costs for you as well. So be sure to shop around with a few companies or a digital broker like CoverWallet or ez.insure or commercialinsurance.net to compare quotes before making your final selection.

Here are the top E&O insurance companies for your consideration.

What factors affect the E&O insurance cost?

The above estimates give you an idea of what companies may anticipate spending on average for E&O coverage. As we already said, the real cost of E&O insurance varies. The value of your policy depends on certain variables

.You must understand how these variables may affect your rates to gain control over your premium costs. That said, the following are some variables that may impact your premium:

Industry

Insurers will initially assess your industry before setting rates. Your industry will determine two essential factors: the likelihood of claims and the possible cost of resolving them. In most cases, professionals like those in medicine, law, finance, architecture, and engineering tend to pay more for E&O insurance. 

Professionals in this field pay more for errors and omissions insurance because their mistakes or omissions usually have devastating consequences. For instance, a doctor’s mistake may lead to the loss of lives, attracting serious lawsuits. 

Location

The cost of E&O insurance varies depending on the location and state where your company operates. Some US states have minimum E&O coverage requirements for particular sectors. As such, firms operating in these jurisdictions may have higher insurance premiums. 

In Idaho, for example, attorneys must have legal professional liability insurance, and in 23 other states, law firms must inform clients if they have E&O coverage. Similarly, most states require doctors to carry minimum malpractice insurance limits.

Also, firms in densely populated areas like New York, San Francisco, and Los Angeles frequently have higher rates. 

Coverage limit

The limit of an insurance policy is the maximum amount your insurer will pay out for claims. Generally speaking, the more coverage you need, the higher your premium costs. Most companies usually require a coverage limit of about $1 million. This coverage limit should cover most risks, but some companies may require larger limits due to their risk profile. 

You must grasp how coverage limitations operate while seeking errors & omissions insurance so that you don’t end up paying so much out of pocket if an incident occurs. 

E&O insurance usually has two kinds of limits: occurrence and aggregate.

  • Occurrence limit: Occurrence limits are calculated per incident. It implies the amount your insurer is willing to pay for every incident, irrespective of the circumstances. 
  • Aggregate Limit: Aggregate limits are calculated for the entire period of the policy. It refers to the maximum amount your insurer will pay out during the course of the policy.

Annual sales

When giving you quotes for E&O insurance, your insurer will want to see your annual income. The more your company earns, the more you will pay for E&O insurance. The rationale behind this is that lucrative businesses are more prone to litigation. And if they lose or have to settle out of court, they usually have to pay more than smaller corporations with less income.

Firm size

Like revenue, the firm’s size affects the cost of E&O insurance. Company size here refers to the number of staff that a company has. 

A company with a large workforce has more hands that can make mistakes. Therefore, the more staff you have, the more you will pay for your E&O insurance premium.

Years of experience

Experts and mature businesses should receive lower rates. This is because professionals tend to make fewer mistakes as they spend more years at their jobs. 

Past claims

Insurers will want to know how many E&O-related lawsuits have been brought against your company. A history with many claims could mean your staff members are reckless at their jobs, so you may have to pay more. However, a history of fewer claims could mean less premium costs.

Deductible types 

Your E&O premium is determined by the deductible you choose. Usually, a high deductible means a cheaper premium. A deductible is the money you must pay before your insurer pays for a covered peril. Most E&O insurers provide two deductible options:

  • First-Dollar-Defense (FD) Deductible: This deductible is only required for paid claims. In other words, the corporation is not required to pay until the issue is resolved.
  • Defense-And-Loss (DL) Deductible: Includes defense expenses and paid claims.

If you are sued for E&O, your insurer will usually engage a lawyer to defend you. The cost of hiring the defense counsel starts piling up as soon as the claim is filed. The lawyer must create a file, research, prepare the case, and defend the client.

 If you have an FD deductible, you will not pay anything until the case is resolved. However, A DL deductible requires the corporation to pay a portion of legal bills even if the action is dismissed.

An FD deductible generally costs more than a DL deductible.

How to obtain cheap E&O insurance

By learning to control some of the variables that affect E&O insurance, you may be able to get lower quotes. Most people choose lower coverage limits and adjust their deductible. While this will work, you might pay more in the event of a covered peril. However, this isn’t the only way to save money on your premium. 

The following are some of the ways you might obtain cheap E&O insurance quotes:

Always compare several quotes

First of all, always shop around with a few companies or work with a top broker like CoverWallet or ez.insure or commercialinsurance.net to get and compare several quotes to select the cheapest one for you. Different insurance companies assess risks differently and they all have their own business strategies to be in favor for or not in favor for particular industries, that impact their pricing strategies for your business. Getting a fast online quote from Thimble is another good way, even just to see the ballpark of your E&O insurance cost.

Pay your premiums in full

You might choose to pay your insurance premiums annually rather than monthly. While making smaller monthly payments saves money upfront, paying a yearly premium saves money by up to 25% in the long run.

Maintain coverage

Some companies prefer to obtain professional liability insurance at the outset of a project and cancel it at the end since it is cheaper. However, this method may cost you dearly. Your professional liability insurance coverage must be active if you want to receive its full benefits. If you want to avoid paying for professional liability litigation, you need ongoing coverage. 

Reduce hazards 

Regrettably, insurance claims raise premiums. Less risk means fewer claims and less money spent on premiums. Sadly, risk is unavoidable. If it were possible to remove risks totally, insurance companies would not be in business. 

Insurance firms do business by offering coverage to mitigate risk. But you may not be aware that they often reward policyholders that strive to reduce risk.

Errors and omissions (professional liability) coverage may be expensive, but risk management can help you lower the cost. A strong E&O risk management plan may include:

  • Having detailed client contracts
  • Keeping good client relationship
  • Attending to client complaints and resolving them quickly
  • Checking (and rechecking!) your work as many times as possible
  • Engaging cybersecurity tools to decrease risks

Contractual risk transfer

Another way to reduce the risk of doing business is to transfer your risks to someone else or another company. You can engage the services of independent contractors for certain jobs. That way, they will be responsible for whatever claims occur while offering their services.

However, while outsourcing, be sure they are covered and seek to be included as an extra insured. So, you’re not exposed if anything occurs. Instead of depending on your coverage, you may use theirs if an incident occurs.

Avoid engaging uninsured subcontractors to reduce your risk. If an uninsured contractor is hurt while working for you, you may be liable for claims. Remember that claims affect your policy’s cost, so make sure subcontractors have their own. They can’t depend on you.

How Much does Errors & Omissions (E&O) Insurance Cost Architects and Engineers?

Architects and Engineers: Any profession that’s responsible for the integrity of a building needs errors and omissions insurance. If a measurement is just a tiny bit off, the whole structure is weakened, and this could lead to disaster. These lawsuits are typically expensive, as in hundreds of thousands, if not millions of dollars. You can also be sued for delays, even if these delays are completely out of your hands. It probably doesn’t surprise you that architects and engineers pay the most for errors and omissions insurance. 

On average, an engineer pays $1,825 a year for an E&O (Errors and Omissions) insurance policy. (or $155 a month). And an architect pays $1,730 a year or $145 a month for a similar policy

Recommendation: Chubb

Chubb serves all fifty states and they provide comprehensive coverage to engineers and architects/designers. You can get up to a $10 million limit, which is great if you’re working with corporate clients. They don’t have online quoting—you have to contact them. 

>>MORE: Top 5 Providers of Professional Liability Insurance for Architects and Engineers

How Much does Errors and Omissions (E&O) Insurance Cost Financial Professionals?

Financial Professionals: They include consultants, investment advisors, financial planners, CPAs, tax advisors, etc. These fields are pretty high risk since you are engaged with other people’s money. When it comes to money, emotions can run high and people can be irrational. Errors and Omissions (E&O) insurance will help protect you from law suits in case your clients are not happy with your services or blame you for their financial loss.

The cost of errors and omissions (E&O) insurance varies by professions. For example, investment advisors on average pay $2,610 a year for an E&O policy; and accountant advisors only pay $400 a year for their E&O policy.

Recommendations: We recommend the best provider for each specific professions below:

  • NAPA: Best for Investment Advisors
  • The Hartford: Best for Accounting Accountants
  • Biberk: Best for Tax Preparers
  • Markel: Best for Financial Advisors

How Much does Errors and Omissions (E&O) Insurance Cost Home Inspectors?

Home inspectors: Some states require home inspectors to have E&O insurance, but even if yours doesn’t it’s a good idea. Home buyers can sue if they discover a problem after they move into a new home and feel you should have told them. On the other hand, if the home inspector notices a problem and the potential buyers back out of the sale, the seller could sue. A handful of states require home inspectors to carry some level of errors and omissions insurance. 

Recommendation: Inspector Pro

Inspector Pro has over fifty years of experience providing insurance to real estate professionals. You’ll simply fill out a short form and someone will get back to you with a quote. If you want, you can fill out a longer form and get approved right away. They have coverage of up to $2 million dollars. 

>>MORE: Best E&O Insurance Companies for Home Inspectors

How Much does Errors and Omissions (E&O) Insurance Cost Appraisers?

Appraisers: Real estate appraisers evaluate how much a home is worth. Since people are emotionally attached to their home, they often overestimate how much it’s worth. They could potentially sue you.

Recommendation: CoverWallet

You can’t beat CoverWallet for quick online quotes. You enter your information and in less than a minute you’re presented with quotes. CoverWallet is an online insurance broker, so you could get quotes from a few companies, which makes comparison shopping very easy. 

>>MORE: Best E&O Insurance Companies for Appraisers

How Much does Errors and Omissions (E&O) Insurance Cost Notaries?

Notaries: You may wonder why a notary needs errors and omissions insurance, since their job involves verifying documents. But what if someone slips you a fake document, or one with a forged signature? Believe it or not, notaries have been sued for mistakes like this. 

Recommendation: National Notary Association

The National Notary Association is a professional organization for notaries. If you get your coverage through them, they can often give you a professional discount. 

>>MORE: Best E&O Insurance Companies for Notaries

How Much does Errors and Omissions (E&O) Insurance Cost Insurance Agents?

Insurance Agents: Since insurance can be considered a type of financial planning, and people are very sensitive about their money, you can see why an insurance agent may need errors and omissions insurance. Something as simple as a typo can inspire a client to sue you for financial loss. 

Recommendation: CNA

CNA sells more errors and omissions policies than any other insurance company. They underwrite for a number of companies, and all of them understand insurance agents and the risks. They’ll give you an online estimate, but to actually buy the insurance you’ll have to call and talk to an agent. 

>>MORE: Best E&O Insurance Companies for Insurance Agents

How Much does Errors and Omissions (E&O) Insurance Cost Tech Professionals?

Tech professions: Most businesses are dependent on technology these days. If any part of technology fails, businesses stand to lose thousands of dollars. If the software you design has a glitch that underestimates an invoice and a company loses money because of it, you could be sued. E&O insurance would protect you and cover your court costs. 

Recommendation: The Hartford

The Hartford can provide you with up to $10 million in coverage, and prior acts are included. They have something called FailSafe, which is specifically for tech professions, and bundles things like security liability, data network liability and intellectual liability all in the same policy. They also have great customer reviews. They don’t have online quoting, though. 

>>MORE: Best E&O Insurance Companies for Tech Consultants

>>MORE: The 9 Best E&O Insurance Companies

What is E&O Insurance?

E&O insurance, or also called professional liability insurance, protects you against the claims of negligence, your failure of delivering professional services, and professional mistakes made against you by your clients.

If you are in the business to deliver professional services to your clients, you will need to have an E&O insurance policy to protect you in case your clients decide to sue you. Even you did not make any mistake, when your clients sue you, you still need the E&O policy to pay for any associated legal costs and attorney fees, which can be expensive.

E&O insurance is also called malpractice insurance for healthcare and legal professionals. They are basically the same.

What does E&O Insurance Cover?

E&O insurance covers negligence, mistakes, omissions, and misinterpretations.

For example, if you are a real estate agent, you advised a client to buy a home at a price based on your analysis of a set of 8 recent sales in that area. You omitted another 5 recent sales in the area with much lower prices. This resulted in a higher recommended price than it should have been. After discovering the omissions, your client can sue you. Your E&O insurance policy would help cover all legal fees, defense attorney costs, and settlements as well. Without an E&O insurance policy, you would have to pay everything out of your pocket.

Who needs E&O insurance?

Anyone can sue any company in today’s world. Sadly, companies that operate on people or provide advice/consultation services are more liable for suing. Therefore, if clients can sue your company for professional errors, you should consider getting this policy. 

The following are some professional service companies that must have Errors and Omissions Insurance:

  • Architects
  • Bankers
  • Doctors
  • Financial advisors  
  • Lawyers
  • Nurses

Basically, any firm that charges for services or advice may be sued. A consumer might easily accuse you of failing to meet your professional commitments. Then you’re in court battling for your company’s image and cash.

E&O insurance companies

The good thing about E&O insurance is that you can purchase the policy with ease through the internet. This kind of insurance is available from most major insurance firms, and many of them provide online quotes. Here are our recommendations for the best E&O insurance companies to make things easy for you.

Last Thoughts

Society has become increasingly litigious. You don’t even have to have made any mistakes for a client to drag you off to court, which is stressful and unsettling. Protect yourself by getting at least a basic E&O insurance policy. That way, someone sues for a frivolous reason, your court costs will be covered, and you can rest easy.

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