Errors and Omissions (E&O)

---

An errors and omissions insurance policy, also known as professional liability insurance, provides financial protection for you and your business if you are accused of making a mistake, professional negligence or not delivering on business agreements.

Regardless of whether an accusation is warranted or not, it will take time and financial resources for you to respond. Small business errors and omissions (E&O) insurance can provide coverage for associated costs up to your policy limit, helping you to avoid disruptions to your business and out-of-pocket expenses.

It’s important to include errors and omissions insurance in your business insurance package to make sure you are protected from risks you could be exposed to while making business decisions with your clients, customers or business partners. 

For example, E&O insurance can cover costs up to your policy limit if:

• A customer says you made a mistake that caused financial harm.
• You miss a deadline while providing a service that negatively impacted your client.
• Someone claims that they lost money because you were negligent in providing business services.

Here are some other benefits of errors and omissions insurance:

When you have errors and omissions insurance, you’re letting your clients know that they will be protected if you make a mistake that financially hurts their business.

For many professions, E&O insurance could be required to get a professional certificate or license, or your clients might ask you to have coverage before they sign a contract with you. 

For example, a real estate agent might need to purchase a real estate E&O policy and provide a certificate of insurance before signing on with a broker. Insurance agents often need to have coverage before they can work with an insurance carrier or agency.

Business disagreements can escalate into legal actions. If your business is accused of professional negligence or making a mistake that causes financial harm, your errors and omissions coverage can help you pay for related expenses until you reach your policy limit. 

For example, if there is a fire in an apartment building, a tenant could file a professional negligence lawsuit that claims the property manager did not properly inspect smoke detectors.

Some other areas where errors and omissions insurance can provide coverage, include:

• Disciplinary proceedings - Costs to defend yourself in cases brought against you by a professional review board or licensing organization.
• Crisis management - Expenses for retaining a public relations firm after an accusation of professional negligence.
• Subpoena assistance – Costs to produce documents and testify in response to a subpoena.

E&O insurance starts at $19 a month but may vary based on your coverage needs, your exposure to risk and your claims history.

The cost of your errors and omissions insurance monthly premium is determined by several factors involving your business operations, including:

Your exposure to risk
Businesses with more exposure to risk typically pay higher rates for E&O insurance than low-risk businesses. If your business is part of a field where a mistake is considered major and costly, you will likely pay more than if a mistake can be easily fixed at less cost.

Your claims and insurance history
Having a history of insurance claims, canceling your policies early, and other related factors can lead to higher business insurance rates.

Your coverage limits and insurance package
If you want more insurance coverage, you’ll have to pay more for higher coverage limits — the amount you or someone else would receive after a claim. When you get an instant quote online with NEXT Insurance, you will typically receive two or three options with our coverage recommendations.

Choose the option that works best for your coverage needs and your budget. You can save 10% on insurance costs by bundling your E&O coverage with another policy, such as general liability, workers’ compensation or commercial auto insurance.

When you are ready to purchase your policy you can choose an E&O insurance monthly premium or annual payment options.