Errors and Omissions (E&O) Insurance
If clients pay you for advice or services, they can claim you cost them money. Errors and omissions insurance covers your defense and settlements when a client says a mistake, oversight or missed deadline caused them a financial loss, even when the claim has no merit.
Reviewed by Nate Feuerman, High Net Worth Insurance Producer at Stonebrook
Last updated
Quick answers
What is E&O insurance?
Coverage for claims that your professional services, advice or work product caused a client financial loss.
Who needs E&O insurance?
Consultants, property managers, real estate professionals, technology firms, agencies and any business that provides services for a fee.
Does E&O cover claims without merit?
Yes. Defense costs are covered for covered claims even when the allegations are groundless.
Is E&O claims-made?
Almost always. It covers claims first made during the policy period, for work after the retroactive date.
What errors and omissions covers.
Negligent advice or services
A recommendation, report or service that a client says caused them a loss.
Mistakes and oversights
Errors in work product, missed details and incorrect information.
Missed deadlines
Failure to deliver on time, when it causes a client financial harm.
Defense costs
Attorneys and experts, including for groundless claims.
Prior acts
Work done before the policy started, back to the retroactive date.
Contract requirements
Many client contracts require E&O with specific limits.
E&O vs. general liability vs. cyber.
| Claim | Covered by |
|---|---|
| A client says your advice cost them money | Errors and omissions |
| A client trips in your office | General liability |
| Client data is stolen in a breach | Cyber insurance (some tech E&O forms combine both) |
| Your board is sued by investors | Directors and officers |
| Care provided to a patient or resident | Professional liability |
What to look for in an E&O policy.
- The definition of professional services.It should match everything you actually do.
- The retroactive date.Keep it continuous when you renew or change carriers.
- Defense costs.Inside or outside the limit, and whether you choose counsel.
- Consent to settle.Whether you have a say before the carrier settles.
- Contractual liability exclusions.Promises in your contracts may not be covered.
A broker who knows your business.
Stonebrook is an independent agency. We work with standard, specialty and excess and surplus lines carriers, so we can shop E&O across standard and specialty carriers instead of fitting you into one company’s program.
Since 1982 we have placed commercial programs for businesses and property owners across the country. We read the fine print, flag the exclusions that matter for your operation, and advocate for you at underwriting, at renewal and at claim time.
Coverage that works together.
Most families need more than one policy. Here is how the pieces fit.
E&O questions, answered.
What does errors and omissions insurance cover?
E&O covers claims that your professional services, advice or work product caused a client a financial loss, including negligence, mistakes, oversights and missed deadlines, plus the cost of defending those claims.
Who needs errors and omissions insurance?
Any business that provides services or advice for a fee, including consultants, property managers, real estate professionals, technology firms, marketing agencies and financial service providers. Many client contracts require it.
What is the difference between E&O and general liability?
General liability covers bodily injury and property damage. E&O covers financial losses caused by your professional services. Most service businesses need both.
Is E&O the same as professional liability?
Yes, in most cases. “Errors and omissions” is the common term for non-medical service businesses; “professional liability” is more common in healthcare.
What happens to my E&O coverage if I close or sell my business?
Because E&O is claims-made, you usually need to buy tail coverage, an extended reporting period, to stay protected for claims made about past work.
How much E&O coverage do I need?
At least what your client contracts require, and enough for the largest loss a client could reasonably claim. Many firms start at $1 million.
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