Errors and Omissions (E&O) Insurance for Professionals

Errors and omissions insurance typically covers legal defense costs, ordered damages, and settlement payouts if a client sues your business for professional mistakes.

Most policies provide protection for:

– Work mistakes and oversights
– Undelivered or unfinished work
– Legal defense costs
– Missed deadlines
– Negligence
– Certain breaches of contract

The term errors and omissions insurance (E&O) is often used interchangeably with professional liability insurance, and for the most part, they’re identical. Depending on your profession or line of work, one term may be used more commonly than another, but both can protect businesses against claims of negligence or mistakes.

COIs for most insurance policies are available as soon as you purchase your policy. Once available, Simply Business provides instant digital certificate of insurance access through your online account any time of day. So if a client needs proof of E&O coverage before signing a contract, you can pull your COI and send it over in minutes.

General liability insurance typically covers physical risks, such as third-party bodily injury or property damage. E&O insurance covers professional risks—specifically the financial losses a client might suffer due to a mistake, omission, or failure to deliver your professional services.

It may help cover claims related to a breach of contract, provided the breach results directly from professional mistakes, oversight, or negligence.

E&O is typically a “claims-made” policy, meaning the policy must be active both when the alleged mistake happens and when the claim is filed. An “occurrence” policy covers any incident that occurred during your policy period, even if the claim is reported after the policy has ended. To ensure your past work remains protected, look for your policy’s retroactive date, which marks the earliest point in time an incident can occur and still be eligible for coverage.

The cost for your insurance coverage is usually determined by factors such as:

– The type of work you do
– Where your business is located
– Your annual revenue
– The types of policies and limits you choose

Other factors can include your claims history and how long you’ve been in business.

If you’re thinking of buying errors and omissions insurance, we recommend having the following information on hand when using our errors and omissions insurance calculator:

– The state where you do business
– Your type of business or trade
– Your annual revenue estimates

This information can make it easier to get a quote from one of our insurers.