Insurance Curator Professional Liability (Errors & Omissions, or E&O) underwriting is a fact-finding exercise. In the U.S.—and specifically for professional firms operating in California cities such as San Francisco and Los Angeles—underwriters probe both business operations and risk controls to set premium, terms, and limits. Below is a practical, SEO-optimized guide to the most common underwriting questions on an E&O application, why underwriters ask them, and how to answer them to improve placement prospects.
Quick snapshot: what underwriters want first
- Who you are (entity type, services, location)
- How you make money (revenue, client concentration)
- What can go wrong (claims history, prior acts exposure)
- How you prevent/catch errors (quality controls, contracts)
- Limits and terms requested (retroactive date, deductible)
For a primer on broader underwriting criteria, see How Insurers Underwrite Professional Liability Insurance (Errors & Omissions): What They Look For.
Core underwriting questions — with context and best-practice answers
1. Describe your business: services, professional designations, and locations
- Why asked: Clarifies scope of exposure. Some services (e.g., financial advice, software development, construction consulting) carry higher E&O frequency and severity.
- Best answer: Provide a concise primary description plus a bulleted list of secondary services. Include office addresses (e.g., San Francisco HQ, satellite office in Los Angeles). Attach marketing materials and website pages.
2. Annual revenue and billing model (project vs. time-and-materials)
- Why asked: Revenue correlates to potential claim size; billing model affects dispute likelihood.
- Best answer: Provide last 12 months’ revenue by service line and expected 12-month projections. Note percent of revenue tied to single clients.
3. Number and role of employees vs. independent contractors
- Why asked: Employee supervision and hiring controls affect risk. Contractors may create vicarious liability or coverage gaps.
- Best answer: Give headcount, roles (licensed professionals, juniors), and contractor management procedures (contracts, oversight, insurance requirements).
4. Claims history (past 5–10 years): suits, incidents, near-misses
- Why asked: Claims are the single strongest predictor of future loss development.
- Best answer: Disclose all claims, lawsuits, and settlements. Attach loss runs and provide narrative on mitigations and corrective actions. For renewal impact, see How Claims History Impacts Professional Liability Insurance (Errors & Omissions) Renewals and Pricing.
5. Prior acts/retroactive date and prior insurance status
- Why asked: Underwriters need to establish coverage gaps and retroactive exposure.
- Best answer: Provide prior policy history, retroactive dates, and any coverage lapses.
6. Contracts and liability allocation (indemnities, hold-harmless, limitation of liability)
- Why asked: Contractual risk-shifting changes insurer exposure.
- Best answer: Submit representative client contracts and highlight risky clauses (broad indemnities, waiver of subrogation, unlimited liability). Consider redlines or purchasing higher limits if unavoidable.
7. Use of standard-of-care disclaimers, written scopes of work, and client sign-offs
- Why asked: Clear scopes and sign-offs reduce disputes about expectations.
- Best answer: Provide templates showing scopes, change order process, and acceptance criteria.
8. Regulatory, licensing, or disciplinary actions
- Why asked: Professional discipline raises underwriting scrutiny.
- Best answer: Disclose and attach documentation; explain remediation and current compliance.
9. Cyber exposures and data handling (if handling client data)
- Why asked: E&O claims increasingly intersect with cyber incidents.
- Best answer: Describe data security, breach response plans, and whether you carry separate cyber coverage.
10. Quality control, audits, and loss control practices
- Why asked: Demonstrates proactive risk management.
- Best answer: Provide audit schedules, peer reviews, and QA processes. See The Role of Audits and Loss Controls in Professional Liability Insurance (Errors & Omissions) Underwriting for deeper guidance.
Common “red flag” application answers
- High client concentration (single client >25% of revenue)
- History of repeated similar claims
- Contracts demanding unlimited liability or onerous indemnities
- No written scopes of work, inadequate record-keeping
- Frequent use of uninsured subcontractors
If any of these apply, review Underwriting Red Flags That Could Limit Your Professional Liability Insurance (Errors & Omissions) Options.
Documentation to attach with your application (checklist)
- Current and prior E&O declarations
- Loss runs for last 5–10 years
- Representative client contracts and master service agreements
- Employee roster and contractor agreements
- Sample proposals/scopes of work and change order forms
- Cybersecurity policies and incident response plan
- Licenses, certifications, and marketing materials
Typical pricing examples (U.S., California focus)
E&O premiums vary widely by profession, revenue, limit selection, and claims history. Marketplaces and carriers provide ballpark ranges:
- Solo consultants / low-risk professionals (e.g., certain marketing consultants): approximately $300–$1,200/year for $1M/$1M limits (Hiscox reports entry-level online quotes in this range for low-risk solos). Source: Hiscox Small Business E&O.
- Small firms (2–10 employees) in professional services: commonly $800–$5,000/year for $1M/$1M limits depending on services and revenue. Source: Insureon market data.
- Higher-risk practices (software developers, financial advisors, architects/engineers): $5,000–$25,000+ annually, often requiring specialized carriers.
Representative carriers and market notes:
- Hiscox: known for online small-business E&O quoting and binder issuance; competitive for solos and small firms. (https://www.hiscox.com/small-business-insurance/errors-omissions-insurance)
- Travelers, CNA, The Hartford: broader commercial appetite and higher-capacity programs used for mid-market firms and professionals needing tailored wording and higher limits.
Sources: Insureon E&O overview (https://www.insureon.com/errors-omissions-insurance) and carrier product pages.
Comparison table — typical starting points (approximate U.S. / California market)
| Carrier / Channel | Typical entry-level $1M/$1M annual premium (approx.) | Best for |
|---|---|---|
| Hiscox (online) | $300–$1,200 | Solo professionals, streamlined issuance |
| Insureon (marketplace) | $500–$5,000 | Small firms comparing multiple carriers |
| Travelers / CNA / The Hartford | $2,000–$10,000+ | Mid-market, higher limits, tailored terms |
Figures are illustrative ranges. Actual quotes depend on services, revenue, claims history, and California-specific exposures.
How to improve answers and placement odds
- Use clear, written scopes of work and client sign-offs.
- Collect and provide loss runs and corrective action summaries.
- Remove or negotiate unfavorable contract clauses where possible.
- Implement basic QA and peer review processes; document them.
- Consider separate cyber coverage if you handle client data.
For practical pre-submission steps, refer to Improving Your Insurability: Pre-Underwriting Steps for Professional Liability Insurance (Errors & Omissions) and review Submission Best Practices: Preparing Your Proposal for Professional Liability Insurance (Errors & Omissions) Underwriters.
Final checklist before you hit submit
- All sections filled; no surprises left for the underwriter.
- Loss runs attached (5–10 years if available).
- Representative contracts and scopes included.
- Clear explanation for any claims or regulatory actions.
- Requested limits and deductibles aligned with contract obligations.
Sources
- Hiscox — Errors & Omissions Insurance: https://www.hiscox.com/small-business-insurance/errors-omissions-insurance
- Insureon — Errors & Omissions Insurance overview: https://www.insureon.com/errors-omissions-insurance
By anticipating these underwriting questions and preparing thorough, documented responses—especially when operating in high-regulation states like California—you materially improve your chances of competitive E&O terms and pricing.