Healthcare Providers and Professional Liability Insurance (Errors & Omissions): Non-Malpractice Risks Explained

Healthcare organizations and individual practitioners in the United States often equate professional liability with medical malpractice. Yet many non-malpractice exposures — administrative errors, telehealth missteps, billing & coding mistakes, and privacy breaches — fall under Professional Liability (Errors & Omissions, E&O) or allied specialty policies (E&O + cyber, HIPAA liability). This guide explains the non-malpractice risks healthcare providers face, what E&O covers (and doesn’t), typical costs by location and provider type, leading carriers, and practical loss-control steps.

Table of Contents

Why E&O matters for healthcare providers

Medical malpractice covers alleged clinical negligence in patient care. E&O fills gaps for professional services that do not rise to clinical malpractice but can still create significant financial and reputational harm:

Administrative mistakes — incorrect documentation, credentialing errors, licensing oversights.
Advice & consulting errors — e.g., a nurse practitioner or clinical consultant giving non-clinical business advice.
Telehealth & technology failures — miscommunications, dropped connections, poor remote assessments.
Billing, coding and documentation errors — leading to allegations of fraud or contract disputes.
HIPAA/data privacy incidents — when PHI is exposed through administrative failures (often bundled with cyber/HIPAA policies).
Contractual liability — failure to deliver contracted professional services (consulting, practice management).
Third-party claims — defamation, negligent referral, or failure to supervise non-clinical staff.

HHS Office for Civil Rights (OCR) enforcement demonstrates the expense of privacy failures — settlements and corrective action plans in the millions for major breaches (see HHS OCR enforcement list) [source: HHS OCR].

Source examples:

HHS OCR HIPAA enforcement: https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/agreements/index.html

What E&O typically covers (and exclusions)

Typical E&O coverages for healthcare non-malpractice risks include:

Defense costs and settlements for covered professional errors or omissions
Claims alleging negligent acts in the performance of professional services
Breach of duty in non-clinical services (e.g., billing, administrative advice)
Contractual liability for professional services (when required by contract)
Network security & privacy (when endorsed or bundled) — to respond to HIPAA breach claims

Common exclusions to watch for:

Intentional wrongdoing or fraudulent acts
Standard medical malpractice (check if your practice policy combines malpractice + E&O)
Employment practices liability (often separate EPLI policy)
Regulatory fines (may be excluded unless an endorsement adds coverage)

Real-world pricing: carriers, ranges, and examples (U.S. market)

Pricing depends heavily on specialty, annual revenue, claims history, limits, and location. Nationwide, small healthcare practices commonly see annual E&O premiums from roughly $300 to $10,000+ depending on exposure. Below are representative carriers and publicly visible product notes:

Hiscox — online quoteable E&O for small businesses; frequently shows low-risk solo providers starting under $300/year for basic $1M/$2M limits when no prior claims exist. (see Hiscox professional liability)
https://www.hiscox.com/small-business-insurance/professional-liability-insurance
The Hartford — established small-business E&O with customizable limits; typical small-practice premiums often range $500–$2,000/year for common healthcare-adjacent providers, depending on limits and exposures.
https://www.thehartford.com/business-insurance/professional-liability
CNA — offers industry-specific healthcare professional liability and management liability solutions for clinics and larger practices; clinic-level E&O and management liability premiums can exceed $5,000–$25,000/year for higher-risk specialties or larger revenue profiles.
https://www.cna.com/web/guest/cna/businesses/industries/healthcare

General market analysis on E&O cost drivers and ranges: Insureon’s guide to professional liability costs provides useful benchmarks and sample ranges across professions.
https://www.insureon.com/professional-liability/insurance-cost

Example premium table (annual estimates) — USA cities

Note: These are illustrative ranges for typical $1M/$3M limits or equivalent, assuming clean claims history. Actual quotes vary by carrier underwriting.

Provider / Service	New York City (NY)	Los Angeles (CA)	Houston (TX)
Nurse Practitioner / Physician Assistant	$600 – $2,500	$500 – $2,200	$400 – $1,800
Physical Therapist (private practice)	$450 – $1,800	$400 – $1,600	$350 – $1,200
Mental Health Counselor (LPC/LCSW)	$300 – $1,500	$300 – $1,200	$250 – $1,000
Medical billing / revenue cycle firm (E&O + cyber)	$800 – $4,500	$700 – $4,000	$600 – $3,500
Small outpatient clinic (multisite, mgmt risk)	$3,000 – $25,000+	$2,500 – $20,000+	$2,000 – $18,000+

(Estimates compiled from carrier product pages and market data such as Insureon and public carrier guidance.)

Location-specific considerations

New York and California often carry higher premiums due to denser populations, higher litigation environments, and state-specific regulatory exposure.
Texas and Florida can have variable pricing — Texas often more moderate unless specialty exposure exists.
Rural practices may enjoy lower E&O rates but can face different operational risks (staffing, telehealth dependency).

Cyber & HIPAA: why bundle or endorse?

A HIPAA-related breach can create regulatory penalties, investigation costs, notification expenses, and class action exposure. E&O policies alone may not fully respond — cyber liability with a HIPAA endorsement is a common solution for healthcare providers. HHS OCR enforcement records highlight the scope and cost of privacy failures; combining E&O and cyber helps:

Provide breach notification and credit monitoring funds
Pay regulatory defense costs (where insurable)
Cover business interruption from ransomware (cyber policies)

Claims examples (non-malpractice) — real exposures

A telehealth platform’s dropped consult led to an allegation of failing to advise a patient properly (E&O claim for negligent advice).
A billing company miscoded services, triggering an audit and False Claims Act allegation (E&O + defense for contractual liability and administrative errors).
PHI posted to a staff portal without access controls — HIPAA breach with OCR investigation and settlement (cyber/HIPAA response).

How to buy the right E&O for healthcare

Inventory your exposures — clinical vs non-clinical services; telehealth; billing & contracts.
Ask carriers about HIPAA/cyber endorsements — ensure privacy breach response is included or separately bound.
Choose appropriate limits — common healthcare marketplace limits are $1M/$3M; higher revenue practices may need $2M/$4M or more.
Review contract requirements — many managed care, vendor, and hospital contracts require specific E&O wording and limits.
Compare carriers — Hiscox and The Hartford offer small-practice solutions; specialty-focused carriers like CNA address clinic and institutional exposures.
Consider risk mitigation — staff training, telehealth protocols, robust billing controls, and incident response plans reduce claims frequency and premium impact.

For professional services outside core clinical work (e.g., practice management consulting, health IT vendors), see our industry guides for tailored advice: E&O Insurance for Consultants: Coverage, Limits and Contract Tips and Professional Liability Insurance (Errors & Omissions) for Technology Companies: What Devs Need to Know. For niche healthcare-adjacent risks, consider reading Specialty Professions: Tailored Professional Liability Insurance (Errors & Omissions) Advice for Niche Practices.

Practical loss-control checklist (quick)

Implement written telehealth consent and documentation standards.
Use audited, HIPAA-compliant vendors for cloud storage and billing.
Conduct quarterly coding and billing audits.
Maintain incident response and breach notification templates.
Train staff annually on PHI handling and social engineering.

Final thoughts

For U.S.-based healthcare providers, E&O is not a replacement for medical malpractice — it’s a complementary policy that protects against a broad set of administrative, contractual, telehealth, and privacy risks. Premiums vary widely by city, specialty, and revenue; carriers like Hiscox, The Hartford, and CNA offer solutions at different scales. Evaluate E&O in combination with cyber/HIPAA coverage, confirm contract requirements, and invest in risk management to reduce both claim likelihood and insurance expense.