Errors & Omissions (E&O) Insurance

As a small business, employee, or independent contractor, you could be sued for a mistake or oversight. Errors & omissions (E&O) insurance can provide you with an attorney, pay for your defense costs, and cover any related settlement payments.

Learn how E&O insurance from Berxi gives you the financial support you need to survive a lawsuit – and the peace of mind to ensure your business thrives.

What Is Errors and Omissions (E&O) Insurance?

Errors and omissions insurance, also known as professional liability insurance, is a type of insurance specifically designed for those who work in professional services industries, such as financial professionals, consultants, real estate brokerages, freelancers, and many others.

Errors and omissions insurance helps protect your business if a client sues you for making a mistake, whether the alleged mistake is an “error” (i.e., doing something incorrectly) or an “omission” (i.e., failing to do something that should have been done).

For example, if a financial planner offers advice to their client that leads to a large financial loss, that client could sue the planner or their firm for negligence. Errors and omissions insurance can help provide a dedicated claims team to offer support, hire an attorney, pay for defense costs, and cover a settlement relating to the claim.

The costs of defending or settling even a trivial claim can be substantial. It can also create a distraction from running your business. E&O insurance helps minimize the disruptions and out-of-pocket costs that come with such claims, while supporting you through every step of the claims process. Having the right insurance coverage can give you the peace of mind and confidence you need to focus on growing your business.

Who Needs Errors and Omissions Insurance?

The simple answer is that E&O insurance is valuable for any business, employee, or independent contractor who has clients and provides services requiring a professional level of skill or expertise. Some of the professionals and small business owners who should consider errors and omissions insurance include:

• Consultants, including HR, risk management, PR, safety, and educational consultants
• Financial planners
• Creatives and freelancers, such as photographers, graphic designers, social media specialists, and copywriters
• Grant writers
• Home inspectors and appraisers
• Insurance professionals, including agents, brokers, claims adjusters, and appraisers
• Mortgage brokers
• Real estate professionals
• Recruiters
• Tax preparers and bookkeepers
• Technology professionals
• Translators
• Web developers

In some cases, business contracts and service agreements require E&O insurance for small businesses and independent contractors. And even if insurance isn’t a contractual requirement, many professionals and small businesses opt for the protection E&O insurance provides.

E&O insurance is the “I hope I never make a mistake that harms someone else, but if I do, I don’t want it to financially ruin me” type of insurance: It protects you in case of a lawsuit filed by a client over an alleged or actual mistake. And E&O insurance isn't just for business owners – employees and independent contractors may also want it so they don’t have to worry about the financial burden of a potential lawsuit.

Mistakes do happen, even to the most diligent professionals. That’s why E&O insurance is so important. For example, a real estate brokerage might accidentally publish the incorrect square footage for a home they’ve listed. An unhappy buyer might sue over that error. If the real estate broker had E&O insurance, their policy would typically cover the cost of legal proceedings and outcomes. In cases like these, E&O insurance can be a financial lifesaver.

What Does Errors and Omissions Insurance Cover?

If a client sues you for an unintentional negligent act or omission, E&O insurance covers the cost of defending yourself against the claim, as well as the settlement amount or damages that you may have to pay. These unintentional acts include:

• Bad advice, such as when a client alleges that they lost money or suffered other damages as a result of advice they received.
• Unfulfilled promises, such as missing a deadline or failing to deliver a promised service.
• Negligence, such as when a professional fails to meet a certain standard of care.
• Errors, including any inadvertent mistakes made while serving a client.
• Copyright infringement, when a professional unintentionally violates someone else’s copyright.

Even if a client’s lawsuit is baseless, E&O insurance is valuable because it covers the substantial costs of defending yourself against a claim. Here is a partial list of expenses typically covered by E&O policies:

• Attorneys’ fees
• Arbitration costs
• Expert testimony fees
• Court costs
• Cost of attending trials
• Settlement and judgment costs
• License protection (if a licensing authority investigates you)
• Wage loss for some of the time you spend assisting counsel with your defense

Your E&O policy will also include access to a team of claims representatives who can help you navigate the process. At Berxi, you’ll hear back from a claims expert within 24 business hours. They will help you create a game plan, connect you with legal experts, and allow you to focus on your business.

What Does Errors and Omissions Insurance Not Cover?

There is no single line of insurance that covers every risk confronting a business. E&O insurance is no different: It covers some key professional liability risks, but it doesn’t cover everything, such as personal liabilities that should already be covered by other types of insurance policies.

Here are some types of claims and liabilities that aren’t covered by E&O insurance:

• Bodily injury or property damage. Claims concerning a customer who slipped in the office or an accident that damaged a neighbor’s property are among the kinds of risks typically covered by general liability insurance.
• Personal injury. This category includes claims such as libel and slander, which are usually covered by general liability insurance.
• Discrimination. Disputes with current, prospective, or former employees concerning alleged discriminatory employment practices or wrongful termination are generally covered by Employment Practices Liability Insurance (EPLI).
• Work-related injuries to employees. Workplace accidents that result in bodily injury to employees are typically covered by workers’ compensation insurance.
• The costs of responding to a data breach. Coverage for the costs of a data breach, such as informing customers and providing them with credit counseling, will be covered by a cyber-insurance policy.
• Criminal activity. E&O insurance policies always contain exclusions barring coverage for intentionally fraudulent or illegal acts.

Another important aspect of E&O insurance is that it is almost always written on a claims-made basis, which means that the insurance policy covers only those claims against you that are made (and reported to your insurer) within the policy’s effective dates, regardless of when the alleged act took place. To continue this coverage, the policy will have to be renewed or replaced so there are no gaps between policy periods.

Errors and Omissions vs. General Liability

General liability insurance is designed to cover accidents that could happen in almost any setting, such as a client slipping and falling on your property. E&O insurance protects you against claims regarding something you did as a professional, such as bad advice, an unintentional mistake, or failure to properly deliver a service.

How Much Is E&O Insurance?

The cost of E&O insurance will depend on:

• Your profession and business type
• Where you operate your business
• How much revenue your business generates
• Whether there are any previous claims filed against you

Because Berxi offers insurance directly to our customers, without a broker in the middle, we’ve eliminated many of the fees typical in insurance purchases. That means you’re able to save an average of 15% vs. industry standards.

For lower risk professions, such as graphic designers, a Berxi policy starts at about $480 per year. For other professionals, such as home inspectors, a policy might start around $1,000 per year. The best way to get an idea of what your policy would cost is by getting a free quote. Our online quote process only takes a few minutes, and – if you choose to purchase – your policy can go into effect any day you’d like, including that same day.

Is Errors and Omissions Insurance the Same as Professional Liability Insurance?

Yes. E&O insurance is a type of professional liability insurance, and the terms are often used interchangeably. Other types of professional liability insurance include medical malpractice and dental malpractice insurance.

Why Should I Choose Berxi for My E&O Insurance?

We’re working to create a simpler, faster, and better insurance experience for our customers. But we also know that this is a really important decision, so we want to make sure you have all the information you need. Here are a few things that set us apart from other insurance companies:

• We’ll save you money. Berxi is a direct-to-customer insurer. This means we’re not just the people who sell you an insurance policy – we’re also the people who are responsible for handling your claim. Working directly with us eliminates many fees that are typical in insurance transactions. In fact, our customers save an average of 15%.
• We’ll save you time. Because Berxi is an all-digital platform, you can go on our website to get a quick quote, buy a policy, and download your certificate of insurance – all in the same day. And if you ever need to file a claim, you can do that online, too.
• We have your back. Berxi is part of Berkshire Hathaway Specialty Insurance Company, an A++ rated insurer. That means we have the financial stability to make sure you’re protected for the long term.
• Our customer support is world-class. If you purchase insurance from Berxi, you’ll get top-notch customer support when you need it. When you call our support line, which is open from 8 AM to 8 PM, five days a week, you won’t have to navigate through an endless phone tree or argue with a robot: You’ll reach a real-life human being who will work hard to answer all your questions. And if a claim is ever filed against you, our team will help you to navigate the claims process, every step of the way.

What Are the Benefits of a Berxi E&O Insurance Policy?

Here are some noteworthy features of our E&O policies:

• 24/7 online access to your account
• Flexible payment plans
• No interest payments
• No hidden service fees
• A++ financial strength rating
• Industry-standard limits
• World-class customer support
• Available add-ons, including cyber insurance, general liability insurance, and more