Do You Need E&O Insurance (Guide for 2025)

Updated: August 28, 2025

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Key Takeaways

Legal requirements vary by state and profession. Alaska requires E&O insurance for real estate professionals, while Texas doesn't mandate coverage.

High-liability professions benefit most, including mortgage brokers, accountants, lawyers, consultants, engineers and technology professionals.

Consider additional coverage like cyber liability, general liability, employment practices liability, and fidelity bonds for full coverage.

How Does E&O Insurance Work for Professionals?

Errors and omissions (E&O) claims don't happen immediately. Clients might discover problems months or years after you complete work, then file lawsuits long after you've moved on. E&O insurance operates on a claims-made basis, requiring your policy to be active when both the error occurred and when someone files the claim.

Continuous coverage becomes essential because of this timing issue. Your policy handles legal defense costs, settlements and judgments when clients sue over covered professional mistakes. Dropping coverage leaves you vulnerable to claims from previous projects, but getting tail insurance extends financial protection when changing careers or retiring.

Do You Need It in Financial Services?

Most financial advisors, investment managers and registered investment advisors aren't legally required to carry E&O insurance. The exception is Oregon, which mandates at least $1 million in professional liability coverage for state investment advisors.

The financial services industry carries unique risks that make coverage worth considering. Managing client retirement accounts or investment portfolios puts you in a vulnerable position. If you give someone the wrong advice about their retirement savings, you could face a lawsuit that costs far more than any commission earned. Even without state mandates, client contracts and financial institutions increasingly require proof of errors and omissions insurance before working with you.

Do You Need It in Insurance?

Only Rhode Island legally requires insurance professionals to carry E&O coverage. Agents, brokers and producers need minimum limits of $250,000 per occurrence and $500,000 aggregate. Most other states ask you to tell clients whether you have coverage.

Insurance agents, brokers, and producers face real liability risks daily. When you sell someone coverage that doesn't protect them during a major loss, they'll be left with considerable financial costs. The same happens when you miss important policy exclusions or give wrong advice about what's covered, especially if the insurer denies their claim. Beyond legal requirements, most insurance companies won't let you sell their products without E&O coverage, so you'll need it to stay in business.

Do You Need It in Real Estate?

Real estate agents, brokers, home inspectors and appraisers must carry E&O insurance in multiple states, with required limits varying significantly by state and specialty. Nebraska requires a minimum of $100,000 combined single limit for real estate professionals, while Rhode Island mandates higher coverage at $250,000 per claim and $500,000 annual aggregate for insurance producers (different industry).

Nevada takes it a step further, specifically requiring annual proof of both E&O and general liability insurance for license renewal. Even in states without mandates, E&O coverage makes financial sense since real estate transactions involve complex processes. A single mistake can cost thousands for all parties involved.

Do You Need It in Tech?

No states legally mandate E&O insurance for tech professionals, but more clients are asking for it before they'll work with you. Software developers, IT consultants, cybersecurity firms and other technology companies face risks that traditional business insurance doesn't cover.

A coding error that crashes a client's e-commerce site during Black Friday could cost them millions in lost revenue. You might also miss security gaps that expose customer data, triggering regulatory fines and lawsuits. Tech E&O policies handle these technology-related claims, and most enterprise clients require proof of coverage before signing contracts.

E&O INSURANCE VS. PROFESSIONAL LIABILITY VS. MALPRACTICE INSURANCE

These three terms describe identical coverage, but different industries prefer different names:

E&O insurance is what tech companies, real estate agents, and insurance brokers typically call it.
Professional liability insurance is the preferred term for consultants, architects, and engineers.
Malpractice insurance is what health care providers and lawyers use.

All three protect you from lawsuits over work mistakes, no matter what name your industry uses.

E&O Insurance Requirements by State

E&O insurance requirements vary from state to state. Check what your state requires so you don't run into licensing problems. The following require coverage for certain professionals:

State	Business or Profession	Requirements
Alabama	Attorneys	Must maintain $100,000/$300,000 professional liability coverage to participate in Alabama State Bar's Lawyer Referral Service program.
Alaska	Real Estate Professionals	Must provide proof of E&O insurance to the REC in order for your renewal to become effective. An initial applicant can obtain E&O insurance before they are issued a license.
California	Attorneys	Must inform clients in writing when they do not have professional liability insurance. No mandatory coverage requirement.
Colorado	Physicians and Physician Assistants (3+ years experience)	Must maintain minimum $1 million per incident and $3 million annual aggregate professional liability insurance.
Colorado	Real Estate Professionals	All of the professions regulated by the Division of Real Estate, except subdivision developers and appraisal management companies, are required to have errors and omissions (E&O) insurance.
Connecticut	Physicians	Must maintain minimum $500,000 per occurrence and $1.5 million aggregate professional liability insurance.
Connecticut	Physical Therapists	Must maintain minimum $500,000 per occurrence and $1.5 million aggregate professional liability insurance.
Connecticut	Dentists	Must maintain minimum $500,000 per occurrence and $1.5 million aggregate professional liability insurance.
Connecticut	Optometrists	Must maintain minimum $500,000 per occurrence and $1.5 million aggregate professional liability insurance.
Hawaii	Midwives	Must report settlements or arbitration awards if they do not possess professional liability insurance, but coverage itself is not mandatory.
Idaho	Attorneys	Must maintain minimum $100,000 per occurrence/$300,000 annual aggregate professional liability insurance if they represent private clients.
Idaho	Physician Assistants (3+ years experience)	Must obtain professional liability insurance if not covered by their facility or practice.
Idaho	Real Estate Professionals	Each licensee who is actively licensed under this chapter shall, as a condition to licensing, carry and maintain errors and omissions insurance to cover all licensed activities under the provisions of this chapter.
Illinois	Attorneys	Foreign legal consultants must provide "appropriate evidence of professional liability insurance or other proof of financial responsibility".
Indiana	Attorneys (Law Firm Entities)	Law office entities (PC/LLC/LLP) must upload current professional liability insurance declaration page annually for Certificate of Registration renewal.
Indiana	Midwives	Must maintain minimum $100,000 per incident/$300,000 aggregate professional liability insurance.
Iowa	Real Estate Professionals	All active licensees (broker, salesperson, corporation, LLC, partnership, etc.) must carry uninterrupted errors and omissions insurance coverage in Iowa. Proof of coverage must be provided with all new applications and when reactivating an inactive license.
Kansas	Healthcare Providers	Must maintain minimum $500,000 per claim/$1.5 million annual aggregate basic professional liability coverage and participate in the Health Care Stabilization Fund as a condition of active licensure.
Kentucky	Real Estate Professionals	Errors and Omissions insurance is required for all real estate professionals in Kentucky.
Louisiana	Real Estate Professionals	All active licensees licensed are mandated to carry errors and omissions insurance to cover all activities contemplated under this Chapter.
Maryland	Advanced Practice Registered Nurses	Must notify patients in writing if they do not maintain professional liability insurance coverage or if coverage has lapsed.
Massachusetts	Physicians	Must maintain mandatory medical malpractice insurance coverage in minimum amount of $100,000 per occurrence/$300,000 aggregate if engaged in direct or indirect patient care.
Massachusetts	Attorneys	Must certify whether they are covered by professional liability insurance and provide carrier information as part of annual registration filing. Coverage itself is not mandatory.
Montana	Real Estate Brokers/Salespersons	Must maintain continuous professional liability insurance coverage during period of active licensure, with minimum coverage through board-approved group policy or independent policy.
Nebraska	Attorney Professional Organizations	Professional corporations, LLCs, and LLPs must maintain mandatory minimum professional liability insurance of $250,000 per attorney employed (up to $1M per claim) and $500,000 aggregate per attorney (up to $5 million).
Nebraska	Attorneys	Must certify annually whether covered by professional liability insurance and report any changes within 30 days. Coverage itself is not mandatory for individual attorneys.
Nebraska	Health Care Providers	Must maintain minimum professional liability insurance ($500,000/$1 million for physicians/CRNAs, $500,000/$3 million for hospitals until 2025, then $800,000/$3 million for all) and participate in Excess Liability Fund as qualifying health care providers under Hospital-Medical Liability Act.
Nebraska	Real Estate Professionals	The State Program Administrator will certify to the Real Estate Commission that all applicants for new licenses (or renewals) have proof of errors and omissions insurance. Coverage must specify not less than $100,000.00 combined single limit liability coverage for each occurrence.
Nevada	Real Estate Brokers/Salespersons	Must show proof of insurance for both Errors & Omissions and General Liability annually for certificate renewal.
New Jersey	Physician Assistants	Must maintain malpractice liability insurance or letter of credit as condition of licensure, effective August 1, 2016.
New Mexico	Health Care Providers	Must maintain minimum malpractice liability insurance and participate in Patient's Compensation Fund.
North Dakota	Home Inspectors	Certificate of liability insurance with errors and omissions insurance coverage in the amount of $100,000 or more covering all home inspection activities (Home Inspectors only).
Ohio	Acupuncturists/Oriental Medicine Practitioners	Must have professional liability insurance coverage in amount not less than $500,000.
Ohio	Professional Design Services (Public Projects)	Must maintain professional liability insurance during services rendered to public authorities, with amount sufficient as determined by public authority.
Ohio	Physicians, Podiatrists	Must provide written notice to patients if not covered by medical malpractice insurance prior to providing nonemergency professional services. Coverage itself is not mandatory.
Oklahoma	Attorneys (Public Defense Contracts)	Must provide proof of professional liability insurance to participate in OIDS county, appellate, capital trial and non-capital trial conflict contracts for indigent defense representation.
Oregon	Attorneys	Must maintain mandatory professional liability coverage through the Oregon State Bar Professional Liability Fund (PLF), which has been the mandatory provider since 1978. This is the only mandatory legal malpractice fund of its kind in the U.S.
Oregon	State Investment Advisers	Must maintain minimum $1 million errors and omissions insurance policy. Required for all Oregon-based state investment advisers since July 31, 2018.
Pennsylvania	Physicians and Health Care Providers	Must maintain medical professional liability insurance under the Medical Care Availability and Reduction of Error (Mcare) Act. The Mcare Fund reports noncompliant providers to licensing boards for license suspension or revocation.
Rhode Island	Insurance Agents/Producers	Must maintain professional liability insurance with minimum $250,000 per occurrence and $500,000 aggregate limits as a licensing requirement.
South Dakota	Real Estate Brokers/Salespersons	Must maintain continuous professional liability (errors and omissions) insurance coverage during period of active licensure. Available through SDREC group policy or independent policy from admitted carriers.
Tennessee	Real Estate Professionals	Proof of errors and omissions insurance policy required for licensing. All individual licensees must carry Errors and Omissions Insurance.
Washington	Attorneys	Must disclose to clients in writing if they do not maintain minimum $100,000 per occurrence/$300,000 aggregate professional liability insurance coverage, effective September 1, 2021.
Washington	Professional Limited Liability Companies (PLLCs)	Must maintain professional liability insurance of at least $1 million if members are required to be licensed to practice such profession, or face personal liability.
Washington	Healthcare Providers (Workers' Compensation System)	Healthcare providers must maintain professional liability coverage of at least $1 million per occurrence and $3 million annual aggregate to participate as approved providers in the state workers' compensation system.
West Virginia	Attorneys (Financial Responsibility Disclosure)	Must disclose annually whether they maintain professional liability insurance with minimum $100,000 per claim/$300,000 aggregate, or alternative financial responsibility.
West Virginia	Attorney Limited Liability Organizations	Limited liability partnerships and professional limited liability companies engaged in law practice must carry $1 million in professional liability insurance.
West Virginia	Medical Professional Limited Liability Companies	Must provide written documentation of intent to maintain at least $1 million professional liability insurance coverage in business name of PLLC for authorization.
Wyoming	Real Estate Professionals	An applicant for a real estate license, a licensee renewing a license or an inactive licensee activating a license shall submit proof of insurance coverage. All licensees shall obtain and maintain errors and omissions insurance coverage under the group program or individual coverage.

Disclaimer

This table shows only states that legally require E&O insurance. If your state isn't listed, it doesn't mandate coverage. Laws change frequently, so double-check your state's current requirements with your licensing board and talk to an insurance professional about what coverage makes sense for your situation.

Is E&O Insurance Enough?

E&O insurance covers professional mistakes, but these professions need different types of coverage to protect against other business risks:


Mortgage Brokers	Cyber liability, fidelity bond, general liability	Mortgage brokers handle sensitive financial data that attracts cybercriminals and identity thieves. Fidelity bonds protect against employee theft of client funds, while general liability covers slip-and-fall accidents at your office.
Accountants	Cyber liability, fidelity bond, employment practices liability	Tax preparers and CPAs store vast amounts of personal financial information that hackers target for identity theft. Employment practices liability protects against wrongful termination or discrimination claims from staff members.
Attorneys	Cyber liability, employment practices liability, general liability	Attorneys handle sensitive client data and high-profile cases that attract cybercriminals looking for valuable information to steal or ransom. Employment practices coverage protects against claims from associates, paralegals and support staff regarding workplace issues.
Real Estate Agents	General liability, cyber liability, commercial auto liability	Real estate professionals spend significant time driving clients to properties and hosting open houses where accidents can occur. Cyber coverage protects against data breaches of client financial information used in transactions.
Management Consultants	Cyber liability, general liability, key person life insurance	Consultants often access client systems and sensitive business data, creating cybersecurity risks beyond professional advice errors. Key person coverage protects your business if you become disabled and can't serve clients.
Engineers	General liability, pollution liability, commercial auto liability	Engineering work can result in bodily injury or property damage beyond design errors, especially on construction sites. Pollution liability covers environmental damage from projects involving hazardous materials or contamination.
Software Developers	Cyber liability, general liability, intellectual property coverage	Developers face lawsuits over copyright infringement and patent violations beyond coding errors and system failures. Cyber coverage protects against data breaches when handling client information or payment systems.
IT Consultants	Cyber liability, general liability, business interruption	IT professionals face the highest cyber liability exposure due to network access and data handling responsibilities. Business interruption coverage protects your income when cyberattacks shut down your own operations.
Veterinarians	General liability, product liability, employment practices liability	Veterinary practices face slip-and-fall accidents from pet owners and potential injuries from animals during treatment. Product liability covers issues with medications, medical devices, or pet food sold at your practice.
Daycare Providers	General liability, abuse and molestation coverage, commercial auto liability	Childcare providers face significant liability from accidents, injuries, and allegations of improper supervision or abuse. Auto coverage is essential when transporting children for field trips or emergencies.

Disclaimer

Many other professions also benefit from comprehensive insurance coverage beyond E&O. Talk to an insurance agent who understands your industry to get a complete picture of your coverage needs and identify any gaps in your financial protection.

Do You Need E&O Insurance: Bottom Line

E&O requirements depend on your state and profession, but don't wait for a mandate to get coverage. High-risk professionals like mortgage brokers, accountants and consultants face expensive lawsuits that E&O alone won't cover. Add cyber liability and general liability insurance for complete financial protection.

E&O Insurance Requirements: FAQ

We gathered the most frequently asked questions about whether you need E&O insurance and answered them below:

How do claims-made and occurrence coverage differ?

Claims-made coverage requires your policy to be active when someone files a claim, even for past work. Occurrence coverage protects you for incidents that happened during your policy period, regardless of when claims are filed later.

How much does E&O insurance typically cost per month?

Our 2025 research shows E&O insurance costs average $78 monthly ($931 annually) across professions, but costs change by industry. Mortgage brokers pay around $166 monthly, while florists average $38 monthly.

Can I get E&O insurance after someone files a claim against me?

You can buy E&O insurance after someone files a claim, but it won't cover that existing claim. New policies only protect against future claims, so maintaining continuous coverage is essential.

Do I need E&O insurance if I'm an independent contractor?

Independent contractors often have higher E&O insurance needs than employees because they lack employer coverage. Client contracts frequently require proof of coverage, and you're personally liable for professional mistakes.

What's tail insurance and when do I need it?

Tail insurance extends your E&O coverage after your policy ends, protecting against claims from past work. You need it when retiring, changing carriers, or leaving your profession to avoid coverage gaps.

Which states require the highest E&O insurance limits?

Rhode Island requires some of the highest E&O limits at $250,000 per claim and $500,000 aggregate for insurance producers. Requirements change by state and profession, so check your specific state's mandates.

Is cyber liability insurance the same as E&O insurance?

Cyber liability and E&O insurance protect different business areas. E&O covers professional mistakes and advice errors. Cyber liability handles data breaches, ransomware and technology failures that could shut down your business operations.

About Mark Fitzpatrick

Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.

Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!

Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.

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sources

Nebraska Real Estate Commission. "E&O Fact Sheet." Accessed August 26, 2025.
Nevada Real Estate Division. "Insurance Requirements." Accessed August 26, 2025.
Oregon Division of Financial Regulation. "Bulletin No. DFR 2022-6: Errors and Omissions Liability Coverage for State Licensed Investment Advisers." Accessed August 26, 2025.
Rhode Island General Assembly. "RI Gen. Laws § 27-2.4-23." Accessed August 26, 2025.
Rhode Island General Laws. "Section 27-2.4-23 - Errors and Omissions Insurance Required of Resident Insurance Producers." Accessed August 26, 2025.

Do You Need E&O Insurance?