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What is the difference between errors and omissions and professional liability insurance?

Both professional liability insurance and errors and omissions insurance offer financial protection from client lawsuits over unsatisfactory work. They are essentially the same types of coverage for mistakes in professional services.

Is errors and omissions insurance the same as a professional liability policy?

Errors and omissions (E&O) and professional liability insurance offer identical coverage. While the two policies are the same, different industries use different terms to refer to the same coverage.

How are professional liability and E&O insurance different?

Errors & omissions insurance is used by those in real estate and the Information Technology (IT) field. This includes IT consulting, app development, web design, and cybersecurity.

Professional liability insurance offers the exact same coverage and is typically used by architects, accountants, and consultants.

You may also hear this coverage referred to as medical malpractice insurance. This is common in the healthcare field.

Even if you already have general liability insurance, you should still get professional liability or E&O insurance. General liability insurance covers liabilities from customer bodily injuries and property damage, but won’t help with claims against professional mistakes or unsatisfactory work.

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How does errors and omissions and professional liability insurance protect my business?

Even if you’re not at fault, the cost of fighting a lawsuit or settling a claim can result in a huge financial loss for small business owners. An E&O or professional liability policy can help cover the legal fees and settlements from client lawsuits over issues like:

  • Claims made for mistakes, oversights, or professional negligence
  • Undelivered services
  • Missed deadlines
  • Cost overruns
  • Incomplete work
  • Breach of contract

There are many scenarios in which E&O or professional liability coverage can protect your business, including:


Imagine if a customer blamed you for a cyberattack and claimed you failed to adequately protect their systems or backup their data. This scenario could result in lawsuits and a significant financial loss.

Cyber liability insurance covers the cost of recovering after a cyberattack. This includes the cost of any lawsuits over data breaches that affected sensitive customer or client information.

While this policy isn’t the same as errors and omissions insurance, it’s often included in it. This bundle is called technology errors and omissions insurance, or tech E&O.

Missed deadlines

There are a number of situations that could result in a missed deadline. For example, your computer or operating system could experience damage and need to go in for repair. Or, you or your staff could get sick, resulting in a delay of completion of work. Any of these scenarios could contribute to missing a deadline and lead to a client lawsuit.

Software glitches

A customer hires you to create an app, but there’s a glitch in the software that results in crashed or exposed data. The client sues you over this glitch and you now have an expensive lawsuit on your hands.

How much does E&O and professional liability insurance cost?

The average cost of errors and omissions or professional liability coverage is about $60 per month. Tech E&O insurance costs vary from an average of roughly $730 per year to more than $1,400.

The cost of E&O and professional liability coverage depends on several factors, such as:

How much coverage you need

Most of our customers (63%) buy an errors and omissions or professional liability policy with a $1 million per-occurrence limit and a $1 million aggregate limit.

Previous claims and lawsuits

If a customer filed an E&O claim or lawsuit against you, your provider could increase your premiums to account for a higher level of risk.

IT consultants, IT project managers, software developers, and other IT professionals are typically at a higher risk of E&O lawsuits. So, they tend to pay higher premiums than others.

Your cyber liability risks

The more cyber risks you face, the more likely you'll have to pay in premiums. The amount of data you handle and the number of employees who can access it increase your chance of a data breach and/or lawsuit.

Your deductible

The higher your deductible, the lower your premium will likely be. Most of our customers opt for a deductible of $1,000 in their E&O or professional liability insurance policy.

Be sure your deductible isn’t so large that it would put you in a financial bind if you had to cover it on a claim.

Find professional liability or E&O insurance quotes with TechInsurance

Complete our easy online application today to compare insurance quotes from top-rated U.S. carriers. You can also consult with an insurance agent on your business insurance needs. Once you find the right insurance policy for your small business, you can begin coverage in less than 24 hours.

Updated: December 14, 2022
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