Insurance Curator Professional Liability Insurance—commonly called Errors & Omissions (E&O)—protects professionals and firms from claims alleging negligent acts, mistakes, or failure to deliver services as promised. This guide focuses on who in the USA needs E&O, estimated premium ranges, and state/city considerations so you can make a practical buying decision.
For core definitions and policy basics, see What Is Professional Liability Insurance (Errors & Omissions)? A Clear Definition for Professionals. For policy triggers and technical details, read How Professional Liability Insurance (Errors & Omissions) Works: Coverage Triggers and Policy Basics. If you’re new to E&O terms, consult Professional Liability Insurance (Errors & Omissions): Key Terms Every Buyer Should Know.
Quick primer: Who needs E&O?
E&O is essential for any professional who gives advice, designs, certifies, reports, or manages client property, money, or risk. It is not the same as general liability (bodily injury/property damage) or medical malpractice for physicians. The Insurance Information Institute outlines when professionals commonly need this protection (III) (https://www.iii.org/article/what-is-professional-liability-insurance-errors-and-omissions-insurance).
Top professions that should carry E&O (by profession)
1. Consultants & Business Advisors
- Common exposures: bad advice, missed deadlines, flawed deliverables.
- Typical annual premium (US small firms): $500–$2,000 for $1M/$1M limits (claims-made policies) depending on revenue and specialty (source: NerdWallet — https://www.nerdwallet.com/article/small-business/errors-and-omissions-insurance).
- Cities to watch: Higher premiums in New York City and San Francisco due to greater claims frequency and higher damage amounts.
2. IT Professionals, Software Developers & SaaS Companies
- Common exposures: software defects, missed SLAs, data loss/corruption claims (note: cyber liability gaps may require separate cyber insurance).
- Typical annual premium: $1,000–$5,000+ for tech firms, depending on revenue and contract values. Startups with low revenue may find quotes from carriers like Hiscox with lower entry pricing (see Hiscox sample offerings at https://www.hiscox.com/small-business-insurance/professional-liability-insurance).
- Important: confirm whether your E&O excludes third-party cyber/data breach—add cyber if needed.
3. Architects & Engineers (A/E)
- Common exposures: design errors, construction defects, professional negligence.
- Typical annual premium: $1,500–$10,000+, scaled to project backlog, revenue and past claims. Higher in states with active construction litigation (California, Florida).
- Note: A/E firms often carry higher limits and project-specific endorsements.
4. Accountants & Tax Preparers (CPAs)
- Common exposures: tax filing errors, incorrect financial statements, missed deadlines.
- Typical annual premium: $1,000–$3,000 for small firms; larger practices pay much more. Policies often tied to revenue and client type.
5. Real Estate Agents & Brokers
- Common exposures: failure to disclose, contract errors, negligent representation.
- Typical annual premium: $500–$2,000 depending on transaction volume, with higher rates in markets like Miami and Los Angeles.
6. Insurance Agents & Financial Advisors
- Common exposures: unsuitable recommendations, misrepresentations, errors in policy placement.
- Typical annual premium: $1,000–$5,000+, exacerbated by high-net-worth client suits or securities-related exposures.
7. Medical Non-Physician Professionals (therapists, counselors, allied health)
- Common exposures: treatment errors, confidentiality breaches.
- Typical annual premium: $300–$2,000 depending on license, specialty, and state regulations. Note: physicians typically carry medical malpractice policies rather than standard E&O.
8. Creative Professionals (photographers, designers, marketing agencies)
- Common exposures: missed deadlines, alleged copyright infringement, failure to deliver creative brief.
- Typical annual premium: $400–$1,500 for small shops; higher for agencies with large client contracts.
Comparison table: Typical premiums & recommended limits (USA small firms)
| Profession | Typical Annual Premium (small firm) | Common Recommended Limit |
|---|---|---|
| Consultants / Advisors | $500 – $2,000 | $1M per claim / $1M aggregate |
| IT / Software / SaaS | $1,000 – $5,000+ | $1M / $2M or higher |
| Architects & Engineers | $1,500 – $10,000+ | $1M / $2M (project-dependent) |
| Accountants / CPAs | $1,000 – $3,000 | $1M / $1M |
| Real Estate Agents/Brokers | $500 – $2,000 | $1M / $1M |
| Financial Advisors / Insurance Agents | $1,000 – $5,000+ | $1M / $2M |
| Therapists / Counselors | $300 – $2,000 | $1M / $1M |
| Creative Agencies / Photographers | $400 – $1,500 | $1M / $1M |
(Price ranges are illustrative based on market reporting and carrier offerings; individual quotes vary by revenue, claims history, and jurisdiction — sources: NerdWallet, Hiscox.)
Sources for price guidance:
- NerdWallet overview and typical cost benchmarks: https://www.nerdwallet.com/article/small-business/errors-and-omissions-insurance
- Hiscox small-business E&O product pages and sample starting quotes: https://www.hiscox.com/small-business-insurance/professional-liability-insurance
- Insurance Information Institute (coverage explanation): https://www.iii.org/article/what-is-professional-liability-insurance-errors-and-omissions-insurance
State & city considerations (USA-focused)
- Litigation environment matters: New York, California, and Florida frequently produce higher claim values and defense costs—expect 10–40% higher premiums in some specialties and metro areas.
- Regulatory frameworks: states like California have unique licensing and consumer-protection rules that affect exposures for architects, engineers, and healthcare providers.
- Local carriers and brokers: large carriers (The Hartford, Travelers, CNA) and digital insurers (Hiscox) operate nationwide but underwriting varies by state. City-level client concentration (e.g., NYC tech firms, LA creative shops) increases both exposure and required limits.
Which companies and pricing examples (market choices)
- Hiscox: digital-first E&O quotes for small businesses and consultants; the company often advertises low entry-level pricing for qualifying risks (see current offers at Hiscox: https://www.hiscox.com/small-business-insurance/professional-liability-insurance).
- The Hartford: established carrier with specialized small-business E&O programs; typical small-firm premiums often fall within the ranges above (see The Hartford small business E&O pages).
- Travelers & CNA: provide industry-specific E&O for A/E, tech, financial, and healthcare sectors—pricing depends heavily on revenue, claims, and contract risk.
(Always request multiple competitive quotes; carriers differ widely on exclusions, retroactive dates, and defense handling.)
How to choose limits & features
- Minimum for most small firms: $1,000,000 per claim / $1,000,000 aggregate. Consider $1M/$2M or higher if you:
- Sign sizable contracts
- Serve enterprise clients
- Work in high-litigation states
- Key endorsements to review:
- Prior acts/retroactive date
- Contractual liability coverage
- Defense outside the limits
- Subcontractor liability / vicarious liability
- Cyber/data breach exclusions or integrations
For an introduction to policy intent and key terms, see Understanding Policy Intent: Why Professional Liability Insurance (Errors & Omissions) Exists and Professional Liability Insurance (Errors & Omissions): Key Terms Every Buyer Should Know.
Steps to buy E&O (practical)
- Inventory exposures—list services, annual revenue, contracts, and highest-dollar clients.
- Collect loss history—past claims or incidents materially affect pricing.
- Seek quotes from 3+ carriers (include specialized carriers for your industry).
- Compare not only premium but limits, exclusions, retroactive dates, and defense arrangements.
- Consider bundling with general liability, cyber insurance, and business owner’s policy (BOP) where appropriate.
Final takeaway
If your income depends on advice, designs, certifications, or service deliverables—and especially if you operate in New York, California, Florida, Texas, or other high-exposure markets—you should strongly consider E&O. Premiums for small U.S. firms commonly range from a few hundred to several thousand dollars per year depending on profession, revenue, and jurisdiction; major carriers (Hiscox, The Hartford, Travelers, CNA) offer varying programs and price points. Get tailored quotes and prioritize the right limits and endorsements for your professional risk.
For deeper reading on coverage mechanics and examples, see: