Why is errors and omissions insurance necessary?

When it comes to the relationship between a business and its customers, there’s an expectation of professionalism. But if a business falls short of those expectations, customers may file liability claims.

Errors and omissions (E&O) insurance*, or miscellaneous professional liability, is like a safety net for business owners. It helps protect against claims from clients or customers who believe they’ve suffered financial losses due to mistakes, oversights or negligence from the business. E&O coverage may be included in some of Allstate’s business owner policies or as separate policy not sold by Allstate*.

The benefits of E&O insurance can help a variety of businesses, including:

  • Lawyers
  • Accountants, financial advisors and other business consultants
  • Real estate agents
  • Medical professionals like doctors, dentists and chiropractors
  • Advertising companies
  • Service providers like photographers, florists, barbers, beauticians and pet groomers

What does E&O insurance cover?

E&O insurance*, or miscellaneous professional liability, covers a wide range of business-related errors and mistakes. Besides negligence and breach of duty, this policy protects against misleading statements, misrepresentations and violations of good faith and fair dealing. It’s also helpful for claims regarding copyright infringement, defamation and other professional misconduct. Plus, E&O coverage is useful for a claim’s legal fees, settlements and judgments.

Remember, E&O insurance is not the same as general liability insurance. While general liability covers bodily injury and property damage claims, E&O insurance helps protect your business from financial losses caused by professional errors and omissions.

Commercial general liability coverage

This type of business insurance policy may help pay for legal expenses or another person's medical bills resulting from an accident at your business.

Product liability coverage

Helps pay for physical harm and property damage expenses caused by a product your business designs, makes or sells.

Employment practices liability coverage

Reduces legal costs if your business is sued by an employee or contractor for things like discrimination, retaliation or wrongful termination.

Non-owned auto liability coverage

Businesses can use this to help pay for medical bills or property damage resulting from an accident caused by an employee who drives their own vehicle for work.

Data compromise coverage

If your business suffers a data breach, this helps pay for certain costs, including creating informational materials and providing credit monitoring services for affected people. It may also be used to help pay for related legal fees.

How much does errors and omissions insurance cost?

Allstate offers several options with limits ranging from $10,000 to $1 million. Several factors affect the premium cost of E&O insurance, including:

  • Policy limits
  • Type of business industry
  • Where the business operates
  • Number of employees
  • History of liability claims against the business

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E&O and professional liability insurance FAQs