Professional Liability (E&O) Insurance
Coverage for service businesses against claims of mistakes, missed deadlines, or bad professional advice.
Professional Liability — also called Errors & Omissions (E&O) — protects service-based businesses against claims that they made a mistake, gave bad advice, missed a deadline, or failed to deliver promised services. It fills a gap that General Liability does NOT cover (CGL is for bodily injury and physical property damage; E&O is for financial harm caused by mistakes).
E&O is essentially required for: lawyers, accountants, financial advisors, insurance agents (we have it!), real estate agents, architects, engineers, consultants, IT services, marketing agencies, and most healthcare providers (where it's typically called "malpractice insurance"). Many client contracts specifically require it as a condition of doing business.
Limits typically run $1M-$5M for small businesses, with deductibles ranging from $1,000 to $25,000. The biggest variation in pricing comes from your specific profession — an IT consultant pays very different rates from an architect or attorney.
E&O is "claims-made" rather than "occurrence-based" insurance, meaning a claim must be filed during the policy period AND the alleged mistake must have happened after a defined "retroactive date." This is why you can't just drop E&O when you retire — you need to maintain "tail coverage" for years afterward.
Related terms:General Liability Insurance·Workers Compensation Insurance