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.
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.
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:
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.
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:
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:
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.
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:
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.
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.
The cost of E&O insurance will depend on:
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.
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.
“Berxi was recommended to me by a friend at another company, and now it seems that everyone where I work has them too! The quoting process was easy… and the price is better than anywhere I’ve found.”
– Jeremy B.
“Completely stress-free setup and customized to my needs. So easy I didn’t even need to talk to anyone!”
– Che H.
“[My claims representative] was so compassionate. He listened and kept me informed on the status of the case. He really cared about what I was going through and reassured me that Berxi was on my side and that I didn’t need to worry.”
– Kim P.
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:
Here are some noteworthy features of our E&O policies:
If you provide professional services to clients, professional liability coverage insures you against claims of negligence or delivering inadequate work products or services (also known as errors and omissions coverage or E&O coverage).
If a claim is filed against you, we’ll help get you your very own lawyer from our network of defense attorneys who specialize in professional liability, and we’ll pay their legal fees. Plus, your attorney works for you, not us: You and your assigned lawyer will enjoy fully confidential attorney-client privilege. We’ll also pay for related defense costs (e.g., court fees, settlements). Check out a sample E&O policy for a real estate franchise to learn more.
Amount Covered: Limits offered vary by profession, with coverage up to:
• $1 million per claim/$3 million aggregate
• $2 million per claim/$2 million aggregate
If you’re investigated by a professional regulatory organization, we’ll help appoint defense counsel for you and pay you for the attorney fees resulting from the investigation.
Amount Covered: $25,000 per policy period
If we ask you to attend any depositions, trials, hearings, or arbitration proceedings in support of your defense, we’ll reimburse you for actual lost wages and any reasonable and necessary expenses.
Amount Covered: Up to $1,000 per day
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