Errors & Omissions

Errors and omissions insurance, also called E&O or professional liability, protects companies against client lawsuits claiming inadequate work or service. It is crucial for professionals like real estate agents, lawyers, and medical practitioners who can make costly mistakes, miss deadlines, go over-budget, and give incorrect advice. E&O insurance is the solution to such mishaps.

What Is Errors & Omissions Insurance?

E&O or professional liability insurance is often referred to as “malpractice” insurance. While both E&O and general liability coverage protect against mistakes and mishaps, they focus on different aspects of protection from third-party liability claims.

An errors and omissions policy covers only financial loss, not bodily injury or property damage. It specifically covers third-party financial loss resulting from substandard product or service performance or an error or omission during client service.

If your customer cannot log into your client-onboarding SaaS platform for a few days due to a bug, they may miss out on new business opportunities. E&O insurance would cover this claim, but not general liability since there was no physical injury or property damage.

Errors & Omissions Coverage

Errors and omissions insurance is valuable for many industries, particularly professional services, as they face costly liability claims. E&O insurance provides additional financial protection.

Who Needs Errors & Omissions Insurance Coverage?

Companies providing professional services face the risk of clients claiming financial losses due to service failure. Many types of operations require professional liability coverage to manage their risks.

Venture Capital

VC firms that manage investments for their clients


Cybersecurity consultants for businesses

Media & Advertising

Ad agencies that handle automatic campaigns for clients.

SaaS Marketplaces

Digital marketplaces connecting customers and vendors

Software Developers

Programmers who build custom API’s made-to-order

Reasons to Get Errors & Omissions Insurance

What Does Errors and Omissions Insurance Cover?

Check your policy documents to confirm what your cyber insurance covers. Here are some scenarios that may or may not be covered. Learn more about cyber insurance coverage here.

Defense Costs

This insurance can cover legal fees from unhappy clients due to mistakes.

Disciplinary Proceedings

Errors and omissions insurance can protect your business from accusations of professional misconduct by government agencies.

Loss of Earnings

Clients’ claims can result in significant income loss, but errors and omissions insurance can provide coverage for this loss.

Employee Errors

This insurance covers mistakes made by workers, contractors, or temp staff.

Claims and Damages

If clients sue over your services or advice, errors and omissions insurance can cover settlements.

Personal Injury

Errors and omissions policies may cover costs for personal injury claims, including slander or libel.

Errors & Omissions Insurance Claim Examples

We can customize your policy to cover any gaps in your company’s unique risks with top-notch enhancements.

Theft of Digital Assets

SellYouLater hired a third-party service provider who had two laptops stolen by a burglar. The laptops contained data of 800,000 SellYouLater clients. SellYouLater, not the service provider, was required to inform clients of the data breach, costing them almost $5,000,000 for notifications and crisis management.

Cyber Extortion Threats

A US tech company hired a foreign software vendor who left default settings on their server. A hacker was then hired for $20,000 to exploit this and threatened to post millions of user records online unless paid. The resulting extortion fees will exceed $2,000,000.

Malicious Code

An intern sent a virus that made computers attack a consulting firm. The attack caused an 18-hour shutdown, costing the firm about $875,000 in repair, restoration, and business expenses.

Exposed Records

A SaaS platform, SaaSyAttitude, had customer data stolen, including credit card details, names, addresses, and phone numbers. Over 365,000 customers were affected and the organization settled with the state attorney general. They must now provide free credit monitoring and restoration for identity fraud victims, and reimburse customers for any losses. The organization is required to improve security policies, add technical safeguards, and perform random compliance audits.

Errors & Omissions Insurance FAQ

What Does an Errors and Omissions Policy Not Cover?

Like other insurance policies, E&O coverage has exclusions. Claims such as the following are not covered by E&O insurance:

Products liability and general liability insurance protect companies from third-party liability resulting from using their product. E&O insurance only covers financial losses, not bodily injury or property damage (with exceptions for medical malpractice and E&O policies with “contingent bodily injury/property damage” coverage enhancements).

How Much Does Errors and Omissions Insurance Cost?

The price of E&O insurance is influenced by factors such as location, claims history, and policy limits. Insurance carriers also consider other factors when determining premiums.

Premiums are usually based on a company’s revenue. Changes in revenue can affect renewal costs. Carriers determine premiums differently based on the industry:

Many insurance companies offer customized errors and omissions policies that affect the cost. These policies often have added benefits.

How Can I Manage My E&O Policy and Risks?

Errors & omissions insurance is a type of professional liability insurance which falls under the business insurance category. Other policies in this category include miscellaneous professional liability, technology E&O, and medical or legal malpractice policies. Before discussing its management, let’s delve deeper into its foundation.

Other insurance policies may work with errors and omissions. For instance, technology E&O and cyber liability coverages are commonly combined as they frequently overlap. To ensure that all risks are accounted for, consult with a reliable commercial insurance broker regarding these coverage options.

Errors & omissions insurance protects your business from lawsuits if a customer disagrees with your industry standards claim. It covers defense costs, settlements, and judgments – think of it as malpractice insurance.

Insurance Brokers For Errors and Omissions Insurance

BrandRock is an insurance brokerage that focuses on data and works closely with clients and underwriters to create transparent, efficient, and reliable risk management solutions. Our team has deep expertise in E&O insurance services. We work with top carriers to create custom risk management programs for public and venture-backed companies, who often struggle with budget constraints and the need for comprehensive coverage.

Bad stuff happens.

Imagine a policy that actually covers it.

Shoot us your email and we’ll kick off a conversation to help get you a quote on the best coverage for your brand.