When I first heard about Errors and Omissions insurance (folks call it E&O too), I honestly thought, “ah, that’s for big fancy companies, not for me.” Well, I was wrong. Big time wrong.
So here’s the deal: this insurance is kinda like a safety net when you mess up in your work. Imagine you’re giving advice or building something for someone and it don’t go the way they wanted—suddenly you could be in court, spending thousands just to say, “look, I tried my best.”
I’ll tell you what it covers in a second but lemme say first: without it, you’re walking a tightrope with no net. I tried that, trust me, scary.
What even is E&O?
Basically, it’s insurance for when you screw up professionally. Not like spilling coffee on someone’s laptop (that’s more general liability). I mean like—you miss a deadline, your advice costs them money, or you forget something important in a project.
Lawyers? Covered. Designers? Yep. Real estate folks? Totally. Healthcare pros? They need it probably more than anybody. Honestly, if you give advice or provide service—you should be thinking about this.
So, what does it actually cover?
From my policy, here’s what I noticed:
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Negligence. Which is just a fancy way to say: if you make a mistake, and someone else loses cash because of it, insurance steps in.
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Missed deadlines. (Happened to me once… not fun.)
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Misrepresentation. Like when you didn’t mean to mislead, but the client thinks you did.
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Legal defense. OMG lawyers charge crazy rates, and this insurance can cover that too.
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Sometimes contract stuff. Depends on the fine print tho.
What it don’t cover? Fraud (obviously), intentional damage, workplace drama, and injuries—those things are separate policies.
Why do I care?
Here’s why: lawsuits ain’t cheap. One small claim can eat your savings, your business, and your nerves. You don’t even gotta be wrong—just defending yourself costs $$$.
I remember reading that even if a claim is totally baseless, you still pay thousands to prove it. E&O saves your backside in that situation. Plus some clients won’t even work with you unless you can show proof you’ve got coverage. Kinda like a badge of trust.
Price tag – what I paid vs what others say
Honestly? Not as bad as I thought. Small business like mine: around $600 a year. I’ve seen friends in healthcare pay a lot more (closer to $1,500+). It depends—your work, size of business, how risky the industry is, all that.
Some people cut corners with higher deductibles to make premiums cheaper. Me? I’d rather pay a bit more every month and sleep okay at night.
Picking the right policy
This was confusing at first. If you’re shopping around, here’s what I learned:
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Figure out what risks you actually got. My weak spot is missed deadlines. Yours might be something else.
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Don’t just look at price, check what’s excluded (fine print is sneaky).
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Limits matter—$1 million might sound huge until you realize lawsuits can burn through it fast.
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Talk to brokers who actually understand your type of work. Some tried to sell me stuff I’d never need.
E&O vs General Liability
Before I researched, I thought liability insurance was all the same. Nope. General liability is like if someone slips in your office and breaks an arm. E&O is if they say your work hurt them financially. Both matter. Together, they cover different angles.
Closing thoughts (my two cents)
If you ask me, running a business without E&O is kinda like driving a car with no seatbelt. Sure, you might be fine, but if something goes sideways—you’ll regret it.
Mistakes happen. Deadlines get missed. Clients misunderstand. That’s just reality. With this coverage, I can keep going without one accident ruining everything.
So yeah… learn from me. Don’t wait until after a close call to start shopping around. Get it early.
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