Updated: September 27, 2025

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Key Takeaways

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You'll pay $32 to $193 monthly for professional indemnity insurance, depending on your job and location.

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Your industry, business size, coverage limits and location determine your professional indemnity insurance cost the most.

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Compare quotes, choose higher deductibles, pay annually and bundle policies to find lower premiums.

How Much Does Professional Indemnity Insurance Cost?

Professional indemnity insurance, which you may know as errors and omissions coverage (E&O) or professional liability insurance, provides financial protection when clients claim your professional services caused them financial harm. It costs $931 annually, 23% lower than the average cost of business insurance.

Costs range from $383 to $2,316 annually, depending on what you do and where you're based. Mortgage brokers pay the highest rates because they handle large financial transactions where mistakes can cost clients significant money. Home-based consultants pay the lowest rates since their work involves smaller contracts with less financial risk.

Find Insurance for Your Business

Select your industry and state to get a customized quote.

Industry
State

What Affects the Cost of Professional Indemnity Insurance?

Your professional indemnity insurance cost depends on six factors. Understanding how each drives your rate up and down helps you anticipate how much you'll spend for business insurance.

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    Your Industry and Risk Level

    Your profession directly affects your E&O premium because some jobs carry higher lawsuit risks. If you're a lawyer, you'll pay $146 monthly since procedural mistakes can cost clients significant money. Barbers pay only 30% of that amount because their worst error is an uneven haircut, not a major financial loss.

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    Business Size and Employee Count

    Additional staff creates more opportunities for professional errors, leading to higher premiums. As a solo engineering consultant paying $76 monthly, you'd see costs rise by 37% with a larger team, as insurers view expanded operations as higher liability risks.

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    Coverage Limits

    Higher coverage limits increase your premiums proportionally. If you pay $1,284 annually for $1 million coverage, you'd pay around 50% more if you double it. That translates to an additional $642, but many businesses find this upgrade worthwhile for the extra security.

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    Revenue and Contract Size

    Businesses with higher revenue pay more because larger contracts mean bigger potential settlements. Our baseline rates assume $300,000 annual revenue. An accounting firm generating $500,000 annually pays roughly 20% to 30% more than if it were earning $300,000 a year.

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    Claims History

    Previous claims significantly impact your professional liability renewal rates. One claim in the past three years can increase your premium by 25% to 50%. You'll also qualify for claims-free discounts of 5% to 15% if you maintain a clean record.

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    Your Location

    Your location makes a big difference in costs. Pennsylvania businesses pay $1,075 annually, while you'd pay just $810 annually in Maine. This $265 gap comes down to how often lawsuits happen in each state and what they typically cost to resolve.

Average Cost of Professional Indemnity Insurance by Industry

We found that home-based businesses pay an average of $37 monthly. While that seems like affordable professional indemnity insurance, what you do for work affects your costs substantially. Mortgage brokers pay almost five times more for the same coverage.

The difference in professional liability insurance costs comes down to lawsuit risks and claim sizes. If you handle large financial transactions, small errors can cost your clients over hundreds of thousands of dollars. Home-based consultants work with smaller contracts where mistakes carry much less financial impact.

Accountants$146$1,751
Ad Agency$99$1,188
Auto Repair$82$989
Automotive$75$900
Bakery$53$634
Barber$43$513
Beauty Salon$49$589
Bounce House$59$709
Candle$42$502
Cannabis$122$1,468
Catering$79$950
Cleaning$55$656
Coffee Shop$61$732
Computer Programming$105$1,257
Computer Repair$63$752
Construction$77$921
Consulting$107$1,288
Contractor$63$759
Courier$50$598
DJ$45$546
Daycare$108$1,296
Dental$84$1,006
Dog Grooming$55$658
Drone$106$1,273
Ecommerce$62$739
Electrical$64$768
Engineering$104$1,248
Excavation$68$813
Florist$38$453
Food$110$1,321
Food Truck$59$708
Funeral Home$81$968
Gardening$40$481
HVAC$81$977
Handyman$54$651
Home-based business$37$445
Hospitality$74$883
Janitorial$50$597
Jewelry$61$735
Junk Removal$67$806
Lawn/Landscaping$51$616
Lawyers$146$1,746
Manufacturing$60$716
Marine$88$1,054
Massage$106$1,272
Mortgage Broker$166$1,992
Moving$82$981
Nonprofit$50$604
Painting$64$765
Party Rental$55$660
Personal Training$70$844
Pest Control$95$1,142
Pet$46$553
Pharmacy$57$688
Photography$64$765
Physical Therapy$94$1,131
Plumbing$90$1,076
Pressure Washing$57$689
Real Estate$125$1,505
Restaurant$82$980
Retail$55$658
Roofing$97$1,170
Security$100$1,197
Snack Bars$48$571
Software$95$1,139
Spa/Wellness$110$1,322
Speech Therapist$99$1,186
Startup$72$864
Tech/IT$98$1,179
Transportation$95$1,139
Travel$97$1,163
Tree Service$75$906
Trucking$111$1,333
Tutoring$61$728
Veterinary$116$1,391
Wedding Planning$77$921
Welding$77$923
Wholesale$62$739
Window Cleaning$62$748

Note: We contacted insurers across all 50 states to get quotes for small businesses with three employees in 79 industries. All quotes were for standalone professional indemnity policies with these limits: $1 million per claim and $2 million total coverage. These rates show what similar businesses pay, but your actual quote depends on your specific business circumstances, claims history and chosen insurance provider.

Average Cost of Professional Indemnity Insurance by State

Where you operate affects your professional indemnity insurance cost. Small business owners in North Carolina pay the lowest rates at $807 annually, while those in New York spend 34% more for similar coverage.

Some states have more expensive legal environments, which means lawyers charge more, juries award higher damages and court cases take longer. If you're based in Pennsylvania or Nevada, you're dealing with these elevated costs. You can still find the best business insurance rates without giving up quality coverage.

Alabama$77$918
Alaska$70$840
Arizona$74$884
Arkansas$74$893
California$87$1,038
Colorado$77$923
Connecticut$84$1,014
Delaware$83$1,001
Florida$84$1,009
Georgia$79$948
Grand Total$78$931
Hawaii$81$967
Idaho$73$882
Illinois$85$1,025
Indiana$76$906
Iowa$74$886
Kansas$75$905
Kentucky$73$870
Louisiana$88$1,051
Maine$68$810
Maryland$74$889
Massachusetts$82$980
Michigan$73$880
Minnesota$73$875
Mississippi$78$934
Missouri$77$923
Montana$77$926
Nebraska$73$881
Nevada$88$1,061
New Hampshire$77$924
New Jersey$88$1,054
New Mexico$78$939
New York$90$1,077
North Carolina$67$807
North Dakota$68$810
Ohio$72$864
Oklahoma$73$877
Oregon$72$865
Pennsylvania$90$1,075
Rhode Island$85$1,024
South Carolina$80$959
South Dakota$73$872
Tennessee$76$909
Texas$78$939
Utah$74$889
Vermont$75$894
Virginia$71$850
Washington$88$1,061
West Virginia$81$978
Wisconsin$76$916
Wyoming$72$865

Note: We contacted insurers across all 50 states and used the same business profile for each quote to compare how location affects pricing. Professional indemnity insurance requirements vary by state, and your profession may be legally required to carry this coverage. Check with your state's professional licensing board for specific requirements.

Find Insurance for Your Business

Select your industry and state to get a customized quote.

Industry
State

Strategies to Lower Professional Indemnity Insurance Cost

Seven strategies can cut professional indemnity costs while helping you find cheaper business insurance without sacrificing quality coverage.

  1. 1

    Determine whether you need coverage

    Before shopping for quotes, assess whether you actually need professional liability coverage. Some professions legally require it, while others mandate it through client contracts or industry licensing boards. Check with your state's professional licensing board and review your client contracts to understand your requirements.

  2. 2

    Choose appropriate coverage limits

    Match your coverage limits to your actual risk exposure rather than buying maximum financial protection. If you're a freelance graphic designer handling $10,000 projects, you need less coverage than an architect designing $2 million buildings. Start with $1 million per occurrence coverage and adjust based on your typical contract values and potential liability exposure.

  3. 3

    Compare quotes from multiple insurers

    E&O insurance rates vary dramatically between insurers for identical coverage. The Hartford quotes $858 annually, while Chubb charges 24% more for the same amount of financial protection. The $204 difference could cover your professional development course or fund your marketing budget for new clients.

  4. 4

    Choose a higher deductible

    Your deductible is what you pay out-of-pocket before your insurance coverage begins. Increasing your deductible from $1,000 to $2,500 reduces your annual premium by 15% to 25%. If you currently pay $1,200 annually, the increase could save you $180 to $300 annually. Make sure you can handle the higher upfront cost if you need to file a claim.

  5. 5

    Pay annually instead of monthly

    Most insurers offer discounts for paying your entire premium upfront, saving you 5% to 10% annually. If you pay $1,200 annually, you'll save $60 to $120 compared to monthly installments.

  6. 6

    Bundle multiple policies

    Combining your professional indemnity with general liability or other types of coverage creates package discounts. Bundling reduces each policy cost by 10% to 20%, making this strategy valuable if you need multiple policies.

  7. 7

    Maintain continuous coverage and clean claims history

    Keep your policy active and avoid gaps in coverage. Insurers reward businesses with consistent coverage history and no claims. You can qualify for loyalty discounts of 5% to 15%, while coverage gaps trigger higher rates as insurers view you as a higher risk.

Cost of Professional Indemnity Insurance: Bottom Line

The average cost of professional indemnity insurance goes from $32 to $193 monthly, based on your profession and location. While factors like industry risk and business size drive these differences, you can find more affordable coverage by comparing quotes, adjusting deductibles and bundling coverage types.

How Much Does Professional Indemnity Insurance Cost: FAQ

We've answered the most frequently asked questions about professional indemnity insurance cost to help you make informed coverage decisions:

How much should I expect to pay for professional indemnity insurance?

What factors affect my professional indemnity insurance premium the most?

How can I get more affordable professional indemnity insurance?

Is professional indemnity insurance worth the cost?

How much coverage should I buy for professional indemnity insurance?

Do sole proprietors pay different rates for professional indemnity insurance?

Does professional indemnity insurance start immediately after purchase?

How We Determined the Cost of Professional Indemnity Insurance

Small business owners shopping for professional indemnity coverage shouldn't have to guess what they'll pay. We collected quotes from insurers across all 50 states using a consistent business profile representing established small professional service companies:

  • Three employees total (including the owner)
  • $150,000 annual payroll
  • $300,000 annual revenue
  • Already insured status
  • $1 million/$2 million (per occurrence/aggregate) coverage limits

We quoted standalone professional indemnity policies rather than bundled packages to show exactly what this coverage costs. It gives you realistic expectations for your own quotes.

About Mark Fitzpatrick

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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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