What errors and omissions insurance is
The Small Business Administration defines it under its own term, professional liability insurance: it is for businesses that provide services to customers, and it protects against financial loss as a result of malpractice, errors, and negligence. Errors and omissions insurance and professional liability insurance are the same cover under two names.
The distinction from general liability is the whole point. General liability covers bodily injury and property damage — someone hurt on your premises, or property you damage. E&O covers financial loss caused by your work or advice: a missed deadline, a wrong figure, a design error, advice that cost the client money. A claim that is only about money lost, with no injury and no property damage, is an E&O claim, not a general liability claim.
What it costs: the Insureon median
Insureon, a small-business insurance marketplace, reports a median of $88 a month, or $1,051 a year, for errors and omissions insurance across its small-business customers, updated 24 March 2026. That median is the governing benchmark on this page because it has the largest stated population behind it: 100,000 small-business owners who bought through Insureon, most with fewer than five employees, revenue of $50,000 to $200,000, and five or fewer years in business.
The spread around that median is wide. Annual premiums in Insureon's data run from about $400 to over $7,000 a year. 43% of its customers pay less than $75 a month, and 28% pay $75 to $150 a month — so the median sits inside a range where the cheapest and the most expensive customers differ by more than ten times.
By profession the range is wide too, on Insureon-derived figures: about $37 a month for a process server, about $45 a month for an accountant, about $110 a month for an IT or tech firm, and about $144 a month for a building designer. Treat those profession splits as Insureon-derived, not independently verified.
Label this figure correctly: it is Insureon's median across its small-business customers. It is not a government figure, not a quote, and not the price you will pay — your profession, revenue, limits, claims history and state all move it.
Why other medians are lower
Other insurers publish lower medians, and they are not wrong — they measure different customers. Progressive reports a national median of $50 a month and an average of $69 a month for new customers in 2025. The Hartford quotes about $76 a month as a minimum for standalone E&O. NEXT says 73% of its customers pay $45 a month or less. Each of those populations is lower-risk on average than Insureon's broad 100,000-customer mix, so their medians sit lower. Compare medians only when you know whose customers they describe.
What changes the price
Insureon names five drivers, and they are the same ones every insurer prices on. Profession first: a building designer carries more exposure than a process server, and the medians above show it. Revenue second: more revenue means more work in the world and larger claims. Limits third: $1,000,000 per claim and $1,000,000 aggregate is the standard quoted limit, and higher limits cost more. Claims history fourth: a past claim raises the next premium. State fifth: rules and claim costs differ by state.
Limits can also be set by someone else. The SBA's Standard Operating Procedure 50 10 8.1, for example, requires environmental professionals to carry at least $1,000,000 of E&O per claim. A client contract can do the same — ask what limit the contract actually requires before you buy.
Claims-made cover and tail cover
Most E&O policies are written on a claims-made basis: the policy that responds is the one in force when the claim is made, not necessarily the one in force when the work was done. That has two practical consequences. First, a gap in cover can leave old work unprotected even if it was covered when you did it. Second, retiring, closing the business or changing insurer needs extended reporting — tail cover — for claims that arrive after the policy ends. Before you buy, ask the insurer in writing whether the policy is claims-made, how long the reporting period runs, and what extended reporting costs.
Who needs it — and when a client requires it
Service businesses need it: consultants, accountants and bookkeepers, IT and tech firms, real-estate agents, insurance agents, marketing consultants, financial planners, home inspectors and engineers. Clients and contracts commonly require proof of it before work starts, and some professions carry it as a licensing or regulatory condition. If you sell a service and a client can lose money because of your work, E&O is the cover that answers that claim — general liability does not.