Errors and Omissions Insurance: What E&O Is, Where to Get It

Making a mistake, or just being accused of one, can create legal problems. Errors and omissions insurance may help.

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Updated Apr 28, 2025 · 3 min read

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Errors and omissions insurance protects businesses against claims of mistakes, negligence, misrepresentation and more. Your business should have E&O insurance if it provides services to customers for a fee.

Of the 19 business insurance companies NerdWallet has rated and reviewed, here are our top picks for E&O insurance.

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Best E&O insurance companies

Errors and omissions insurance is a common type of coverage that virtually all major commercial insurers offer. NerdWallet recommends getting business insurance quotes from several companies so you can compare costs and coverage details.

Next Insurance

Best for: Getting a quote and buying an E&O policy online.

4.5

NerdWallet rating

If you need coverage quickly, you may be able to buy it from Next in a matter of minutes. And you may be able to get a discount if you buy other policies through the company. However, you can’t buy retroactive coverage online. Read NerdWallet’s review of Next Insurance.

The Hartford

Best for: Getting E&O coverage alongside a business owner's policy.

5.0

NerdWallet rating

If you need E&O coverage alongside a business owner’s policy, consider buying both from The Hartford, which allows you to get them simultaneously. You can get an E&O insurance quote from The Hartford online, but you may have to talk to someone on the phone to complete your purchase. Read NerdWallet’s review of The Hartford business insurance.

Hiscox

Best for: Work done outside the U.S.

4.0

NerdWallet rating

E&O insurance policies from Hiscox cover work done all over the world, as long as the claim is filed in the U.S. or Canada. Retroactive coverage, which protects your business against claims arising from the period before you bought your policy, may also be available. You’d need to have had insurance from a different provider at the time of the incident to be potentially eligible. Read NerdWallet’s review of Hiscox business insurance.

State Farm

Best for: Working with an insurance agent

3.5

NerdWallet rating

If you want a professional to handle your business insurance for you, you can enter your ZIP code on State Farm’s website and a local agent will contact you. That agent can help you get a quote and purchase E&O insurance, among other policies. NerdWallet rates State Farm lower than other providers, in part, because customers have filed a higher-than-expected number of complaints with state regulators. But the company still came in second place in the customer satisfaction ratings in J.D. Power's 2024 U.S. Small Commercial Insurance Study. Read NerdWallet’s review of State Farm business insurance.

How E&O insurance works

E&O insurance protects your business finances if you're accused of errors or oversights, failure to deliver a service, breach of contract, professional negligence or failure to meet a standard of care.

It can pay out to cover:

Legal and court costs. This includes attorney fees to deal with a covered claim, which you'll owe whether or not the legal system finds you at fault.

Settlements or judgments owed. If the business owner is found to be at fault, errors and omissions insurance can help with these payments.

Damages and expenses. Your business might have to pay these if it infringes on someone else’s copyright, for instance.

In general, errors and omissions insurance policies are claims-made policies. That means coverage must be in place at the time a claim is made in order for the insurer to cover it. If your coverage lapses, you’ll no longer be protected. Buy a policy as soon as you start serving clients to ensure your business is protected.

Already operating? E&O insurance policies can be retroactive to a specific date defined in the policy. That means they’ll cover claims of alleged mistakes dating back to that point. Online quote flows may not allow you to buy retroactive coverage, so reach out to an insurance agent for support.

Errors and omissions insurance is a kind of professional liability insurance. The two terms are used interchangeably in some industries.

» MORE: General liability vs. professional liability: What’s the difference?

What doesn’t E&O insurance cover?

E&O insurance generally does not cover:

Illegal acts.
Purposeful wrongdoing.
Bodily injury your business causes (general liability insurance typically covers that).
Property damage your business causes.
Data leaks (cyber liability insurance typically covers that).
Employee injuries or illnesses (workers' compensation insurance typically covers that).
Discrimination or harassment claims from employees (employment practices liability insurance typically covers that).

🤓 Nerdy Tip

If you need insurance for a home-based business, note that you can’t get errors and omissions insurance under homeowners insurance endorsements or in-home business policies. You’ll need to buy a separate policy.

Who needs errors and omissions insurance?

If you provide professional services to customers for a fee, you should have some form of errors and omissions insurance.

Those professions might include:

Accounting.
Architecture.
Financial and investment advising.
Insurance.
IT consulting.
Real estate.

Some professionals are required to carry E&O insurance, whether it’s by law, licensing boards or professional associations. For example, Tennessee and Rhode Island both require real estate agents to have E&O policies in place in order to be licensed.

Even if it’s not legally required, clients may ask for proof that you have E&O insurance and decline to work with you if you don’t provide a certificate of business insurance.

» MORE: Do consultants need professional liability insurance?

How much does errors and omissions insurance cost?

The cost of E&O insurance can vary widely depending on:

Whether you’re in a high-risk industry.
How much coverage you want.
Whether there's a history of liability claims against your business.
Where you do business.
Number of employees.

Online brokerage Coverdash says that, for businesses with less than $1 million in annual revenue, premiums generally fall into these ranges:

Professional, scientific and technical services: $800-$3,500 per year.
Technology: $1,300-$2,400 per year.
Construction (contractors E&O insurance): $1,200-$5,000 per year.

And The Hartford says its average customer pays $76 per month, or $912 per year, for E&O insurance.

To find out how much business insurance will cost for your company, get quotes from several insurance providers.

Frequently Asked Questions

Who needs errors and omissions insurance?

Businesses that provide services to customers for a fee likely need errors and omissions insurance or another kind of professional liability insurance. Some of your clients, business partners or licensing boards might also require you to have E&O insurance.

What if my errors and omissions policy expires?

Claims against your business may not be covered. Errors and omissions insurance is typically “claims-made,” which means the policy has to be in effect when the event took place and when a lawsuit is filed in order for the insurer to pay the claim.

What is the difference between E&O insurance and professional liability insurance?

Often, professional liability insurance is simply another term for errors and omissions insurance. Which term is used typically varies by industry. For example, legal and medical malpractice insurance are unique types of professional liability insurance.

Article sources

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Methodology

Business insurance ratings methodology

NerdWallet’s business insurance ratings reward companies that offer small-business owners reliability and ease of use. Ratings are based on weighted averages of scores in several categories, including financial strength, customer complaint data, shopping experience and customer service. Learn more about how we rate small-business insurance companies.

These ratings are a guide, but insurance policy details and prices can vary widely from business to business and provider to provider. We encourage you to shop around and compare several insurance quotes.

NerdWallet does not receive compensation for any reviews. Read our editorial guidelines.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2021.

To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period.

Our star ratings consider ratios for both general liability insurance and commercial property insurance. When an insurer sells policies that are underwritten by several different insurance companies, we consider the NAIC complaint ratios of all the underwriters.