Frequently asked questions about errors and omissions insurance

Errors and omissions insurance (E&O insurance; also known as professional liability insurance) protects your business against client lawsuits over the quality of your work. This includes:

• Professional negligence
• Work errors or mistakes
• Breach of contract
• Missed deadlines
• Undelivered services

Even though it is generally not required by law, any small business that provides professional advice or services should strongly consider getting E&O insurance. Not only will this coverage provide crucial financial protection, it will offer you peace of mind as you work.

Errors and omissions insurance covers the full cost of client lawsuits over unsatisfactory work, such as missed deadlines or budget overruns. This coverage includes the cost of hiring a lawyer, bringing in expert witnesses, court costs, and settlements or judgments.

Even a simple or meritless lawsuit can be financially destructive, sometimes costing your small business upward of $100,000. Errors and omissions coverage offers the key financial protection you need to keep your business afloat during these situations.

Errors and omissions policies traditionally don’t cover cyber liability lawsuits. But insurance providers recognize that data breaches are a major professional risk, especially with the number of cyberattacks increasing yearly.

That's why several insurance carriers are now offering a bundle of errors and omissions insurance with cyber liability insurance called technology errors and omissions insurance.

Technology errors and omissions insurance, or tech E&O, typically includes both first-party cyber liability insurance and third-party cyber liability insurance, which cover different types of data breaches.

Independent contractors and sole proprietors face many of the same risks as small businesses. For example, a client could sue an IT consultant or cybersecurity expert for advice that caused their business financial harm.

E&O coverage can help independent contactors and sole proprietors pay for a lawsuit related to a mistake or oversight. In order to sign a contract, some clients may require you to carry this coverage.

Yes. Even if your business wasn't at fault, you could be sued by a client who believes you made a mistake. Errors and omissions insurance covers legal expenses and settlements for frivolous lawsuits, even ones that never make it to court.

The average cost of an errors and omissions policy is $61 per month. However, you could pay more or less depending on liabilities specific to your business.

To calculate an insurance premium, your insurance provider will consider several factors, including your profession's level of risk, claims history, deductible, policy limit, and business size.

With TechInsurance, you can compare quotes from top-rated insurance providers. This offers you an easy way to save money on E&O insurance.

Beyond comparison shopping, you can also save money on insurance by:

• Bundling policies for a discount
• Choosing low policy limits
• Choosing a high deductible
• Managing risks to avoid claims
• Communicating with your clients

Learn more ways to save money on errors and omissions insurance.

TechInsurance is a trusted insurance expert for all small businesses, including startups, limited liability companies (LLCs) and freelancers, with extensive knowledge of the technology sector.

Technology professions that commonly partner with TechInsurance for their insurance needs include:

• Software developers
• App developers
• IT consultants
• Cybersecurity professionals
• Computer repair and service businesses

As a claims-made policy, errors and omissions insurance covers a claim only if the incident and resulting lawsuit happen while the policy is active. That's why most new businesses purchase an errors and omissions policy early on and maintain the policy for the life of their business.

Maintaining uninterrupted coverage ensures you're protected if long stretches pass between the incident and the resulting lawsuit. Some states have lenient statutes of limitations for these types of suits.

If your business might be exposed to risk now or in the past because you’ve let a prior policy lapse, bring it up with your insurance agent. Options to extend your protection may be available.

It takes just a few minutes to complete our online errors and omissions insurance application. In most cases, we’ll show you quotes as soon as you finish the application. A licensed TechInsurance insurance agent can talk through your options with you before selecting the policy of your choice.

Once you purchase a policy, we’ll email you an E&O certificate of insurance. The certificate of insurance is the formal proof of insurance you need to show when you apply for professional licenses or sign certain contracts.

Our errors and omissions insurance application requires basic information about your business, such as its location, number of employees, and estimated revenue. When you finish the application, you'll receive quotes from our network of top-rated insurance companies.

From there, you can look them over and pick the one that works best for you. If you need help, one of our licensed insurance agents is happy to assist you.

Once you’ve paid for your E&O policy, there are two ways to obtain an ACORD certificate of liability insurance with TechInsurance:

• We can email you your errors and omissions insurance certificate
• You can access your certificate of insurance by logging into your account

This form is the proof of insurance required by commercial leases, client contracts, and applications for certain professional licenses.

To make an errors and omissions insurance claim, contact your insurance provider directly. They will ask for:

• A description of the incident
• Basic information about your business
• Your policy number

Your insurance agent can help guide you through the process and answer any additional questions.

To change the coverage limit of your errors and omissions insurance policy, simply contact your TechInsurance agent at any time to see all your options.

Your agent can adjust the policy limit to give you more or less coverage. We can also help if you need to purchase other insurance policies for your business.

If you cancel your errors and omissions insurance policy before it expires, you run the risk of paying more for the same policy later. Insurance companies typically charge higher rates to businesses that cancel policies.

Because errors and omissions is a claims-made policy, it provides coverage only if the incident takes place and the lawsuit is filed while the policy is active. In some cases, years can pass before a client decides to sue over an incident. Keeping your policy active ensures you’re protected against clients who sue at a later date.

Read more about what you should consider before canceling a policy.

Errors and omissions insurance and professional liability insurance are two names for the same policy. Different industries tend to use different terms for this policy. It’s also called malpractice insurance in the medical industry.

Read more about errors and omissions insurance vs. professional liability insurance.

General liability insurance offers protection if a non-employee sues your business over physical injury, property damage, or advertising injury. Errors and omissions insurance compensates your business if a client sues over a professional mistake.

Read more about the differences between general liability and errors and omissions insurance.