E&O and professional liability are the same coverage. Both protect your business from client lawsuits over professional mistakes and errors.
Discover affordable errors and omissions (E&O) insurance below.
Updated: August 15, 2025
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E&O and professional liability insurance are identical coverage with different names used by various industries.
Both cover professional mistakes and client lawsuits, but don't protect against employee injuries or cyber attacks.
Consider adding general liability, cyber liability and workers' compensation have more financial protection.
There's no difference between E&O and professional liability insurance. They're identical coverage, but different professions are more familiar with one or the other. Doctors, lawyers and architects call it professional liability, while real estate agents, consultants and IT professionals say E&O (errors and omissions).
Both protect you when clients claim your work caused them financial harm. You get legal defense costs, settlements and coverage for professional mistakes.
You need this coverage if you provide professional services or advice to clients. Whether you're legally required to carry it depends on your profession and state, so check with your state's professional licensing board for current requirements. It's essential financial protection for anyone whose work could result in client lawsuits.
Client claims your advice cost them money | Protects you from lawsuits when clients blame your professional guidance for their financial losses. | A financial advisor recommends conservative bonds, but the client loses $50,000 when interest rates spike and wants to sue for "bad advice." |
Professional mistakes in your work | Covers legal costs when errors in your services lead to client damages or project delays. | An architect's miscalculation causes a $200,000 construction delay, and the developer sues for the added costs and lost rental income. |
Missed deadlines affect client business | Protects against claims that your late delivery harmed the client's operations or revenue. | A web developer delivers an e-commerce site three weeks late during Black Friday season, and the retailer sues for $75,000 in lost holiday sales. |
Failure to deliver promised results | Protects when clients claim your services didn't achieve the outcomes you guaranteed or implied. | A marketing agency promises to increase a restaurant's online orders by 30% but only delivers 10% growth, leading to a $40,000 lawsuit over lost revenue projections. |
Contract disputes over deliverables | Covers situations where clients claim you didn't meet the agreed-upon scope or quality standards. | A marketing consultant delivers a campaign that generates fewer leads than projected, and the client sues for $25,000, claiming breach of contract. |
Professional licensing requirements | Protects you when your profession or state mandates coverage for licensing or practice authorization. | A real estate broker in Colorado must carry E&O insurance before obtaining an active license, and failure to maintain coverage results in license inactivation. |
E&O and professional liability cover mistakes in your work, but your business faces other risks, too. You'll also want these other policies to cover what E&O doesn't:
If a client trips in your office or you accidentally damage their property, this handles the lawsuit and medical bills.
Data breaches happen to businesses of all sizes. This coverage helps with ransom payments, customer notifications and getting your systems back online.
Your computers, furniture and office equipment are expensive to replace. Without coverage, fire, theft or water damage could put you out of business.
Most states need you to have workers' comp once you hire people. It pays medical costs and lost wages when workers get hurt on the job.
Whether you drive to client meetings or own delivery vehicles, accidents happen. Regular auto insurance won't cover business use of your car.
A flooded office or power outage can shut you down for weeks. It replaces your lost income and covers ongoing expenses like rent and payroll.
Shareholders, employees or clients can sue company executives personally over business decisions. Without D&O coverage, leaders pay legal costs out of their own pockets.
E&O and professional liability insurance are identical coverage with different names used by different professions. While they protect against professional mistakes and client lawsuits, you'll need additional coverage for employee injuries and cyber risks. Consider adding general liability, cyber protection and workers' compensation for more comprehensive financial protection.
E&O and professional liability insurance offer identical financial protection, but professionals often have specific questions about costs, claims and coverage details. We've answered the most frequently asked questions here:
E&O and professional liability insurance have the same coverage, but different industries prefer different names. Doctors, lawyers and architects call it professional liability, while real estate agents, consultants and IT professionals say E&O, but the coverage is exactly the same.
Contact your insurer immediately when a client threatens legal action or files a lawsuit. Gather all documentation about the claim, including contracts, correspondence and work products. Your insurer handles legal defense and settlement negotiations while keeping you informed.
Requirements vary by state and profession. Real estate brokers in Colorado need E&O insurance for licensing, and many states require it for certain financial advisors, insurance agents and health care professionals. Even when not legally required, it's essential financial protection for any professional providing advice or services.
Match your coverage to your biggest potential loss. A $1 million policy works for most small businesses and consultants, but if you handle million-dollar construction projects or manage wealthy clients' investments, you'll want $2 million or more to cover those bigger risks.
Yes, most insurers offer business owner's policies (BOP) that bundle E&O with general liability, covering both professional mistakes and physical incidents, like client injuries in your office. Bundling often provides cost savings compared to separate policies while simplifying your coverage management.
Based on our 2025 analysis of quotes from major insurers, E&O insurance costs an average of $78 monthly or $931 annually for small businesses. Your actual rates may vary significantly based on your specific profession, claims history and coverage needs.
Professional liability excludes employee injuries, cyber attacks, property damage and intentional wrongdoing. You'll need workers' compensation for employee injuries, cyber liability for data breaches and general liability for physical accidents. Professional liability only covers mistakes in your professional services and advice.
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.
