Errors & Omissions (E&O) Coverage
You made a $50,000 mistake. Your client is suing. Can you afford the defense costs—even if you did nothing wrong?
A management consultant gave advice that led to a client's failed expansion. The client lost $2 million and sued for professional negligence.
The consultant's advice was sound. The client ignored key recommendations. But the lawsuit still cost $75,000 in legal fees to defend—and that was before a $25,000 settlement to make it go away.
Total cost: $100,000
The consultant's general liability policy? Paid $0.
Professional mistakes aren't covered by standard business insurance. That's the gap that puts your personal assets—and your reputation—at risk.
1 in 5
professionals face a claim each year
$50K+
average defense costs—even for frivolous claims
$150K+
average settlement when cases mediate
$0
paid by general liability for professional services
Calculation errors, missed deadlines, documentation mistakes
Failure to recommend, missing information, bad advice
False promises, exaggerated capabilities, misleading statements
Libel, slander, copyright infringement in professional context
Attorney fees ($300-500/hour), expert witnesses, court costs
Negotiated settlements, court judgments, arbitration awards
License board defense, professional association hearings
If you provide advice, expertise, or specialized services for a fee, you need E&O coverage.
An IT consultant configured a client's cloud backup incorrectly. When ransomware hit, backups were corrupted. Client lost 6 months of financial data and sued for $500,000.
Without E&O:
$85K legal fees + $200K settlement = $285K (3 years of profit)
With E&O:
Defense fully covered. Consultant paid only $5K deductible.
A financial advisor recommended an investment that underperformed. Client claimed "guaranteed returns" were promised and sued for $1.2M.
Without E&O:
$150K legal fees before dismissal. Nearly lost practice.
With E&O:
Defense costs fully covered. Business survived.
Typical annual premiums:
Insurance isn't an expense—it's protection against catastrophic loss.
Don't let one mistake—or one difficult client—destroy what you've built. Even if you win in court, you lose financially without proper coverage.