If you’re a consultant, freelancer, or run a service-based business, you’ve probably heard of Errors and Omissions (E&O) Insurance—and if you haven’t, you should. One mistake or missed detail could result in a lawsuit, even if it wasn’t your fault.
But how much does E&O insurance actually cost?
Let’s break it down.
💡 What Is E&O Insurance?
Errors and Omissions Insurance protects you if a client claims your service caused them financial harm due to:
- A mistake or oversight
- Missed deadlines or undelivered work
- Negligence or misrepresentation
- Breach of contract or professional duty
It covers legal fees, settlements, and court costs—even if the claim is baseless.
💰 Average E&O Insurance Cost
The cost of E&O insurance depends on your industry, experience, claims history, and the size of your business.
🔢 Typical Price Range:
- Freelancers & solo professionals: $400 – $1,000/year
- Small businesses (under 10 employees): $800 – $2,500/year
- Higher-risk professions (finance, legal, tech): $2,000 – $5,000+/year
🧠 Example: A freelance graphic designer might pay around $500/year, while an IT firm handling client data could pay $2,000/year or more.
🧾 What Affects the Cost?
- Industry Risk Level
- Tech, healthcare, legal, and financial services pay more due to higher liability.
- Business Size & Revenue
- More clients = more exposure = higher premiums.
- Coverage Limits
- Standard policies are often $1M per claim / $2M annual aggregate.
- Higher limits = higher premiums.
- Claims History
- Past claims or lawsuits increase your rates.
- Location
- Regulatory environments and legal climates vary by state.
- Deductible Amount
- A higher deductible lowers your premium—but means more out-of-pocket in a claim.
🛡️ What Does E&O Insurance Cover?
- Attorney fees and court costs
- Settlements or judgments
- Administrative and investigation costs
- Claims of negligence, errors, or omissions
- Accusations of breach of contract
🚫 What’s Not Covered?
E&O insurance does not typically cover:
- Bodily injury or property damage (that’s general liability)
- Employee lawsuits (covered by EPLI)
- Criminal acts or intentional misconduct
- Data breaches (covered by cyber liability)
📍 Where to Get E&O Insurance
Top E&O insurance providers for small businesses and professionals include:
- Hiscox (great for freelancers and consultants)
- Next Insurance (affordable and fast online quotes)
- Travelers (reliable for larger businesses)
- Chubb (broad coverage, great for legal or finance professionals)
- TechInsurance (for IT and software pros)
✅ Final Thoughts
E&O insurance is one of the smartest investments for service-based professionals. Even a minor client dispute could cost thousands—and a good policy will have your back.
💡 Pro Tip: Many clients now require E&O coverage before signing contracts, especially in tech, consulting, and finance.