Professional Liability (Errors & Omissions) Insurance
Also known as E&O insurance, errors & omissions insurance, professional indemnity
For when your advice or your work is the thing that goes sideways — not somebody’s ankle.
Professional liability — errors and omissions, or E&O — covers the financial mess your work or advice can cause someone else. A missed disclosure, a spec that doesn’t add up, a blown deadline, a recommendation that costs a client money: that’s pure financial harm, and your general liability policy won’t touch it because nobody got physically hurt. E&O does, paying your defense and any covered settlement. Two things to know: it’s almost always “claims-made,” so keeping it continuous matters a lot, and intentional wrongdoing is out. If your business gives advice or delivers work people rely on, this is the gap you don’t want left open — and we’ll tell you straight whether you need it.
Reviewed for accuracy by Mark Hutchings, Licensed Insurance Producer (NV #3600994).
Who needs Professional Liability (Errors & Omissions)?
- You’re a real estate broker, agent, or property manager who advises clients, handles transactions, or manages assets and funds on others’ behalf
- You’re a consultant or professional-service firm whose recommendations directly affect a client’s money, contracts, or decisions
- You’re an architect, engineer, or designer whose plans, specs, or drawings carry financial and technical consequences
- You’re a technology or IT provider — a software developer, MSP, or implementation and consulting firm — whose deliverables clients rely on to run their operations
- You’re a design-build or specialty contractor who takes on design, engineering, or other professional decisions — contractors’ E&O (professional liability) covers the costly rework when a design or spec turns out wrong
What it covers
- Claims of negligence, errors, or omissions in the professional services you provide
- Mistakes, oversights, and inaccurate work product that cost a client money
- Missed deadlines and failure to deliver promised services that result in damages
- Bad, incomplete, or disputed professional advice and recommendations
- Legal defense costs — attorney fees, court costs, and expert witnesses — typically even when the claim is groundless
- Covered settlements and judgments, up to your policy limits
What it doesn’t cover
- Bodily injury and physical property damage to third parties — that’s general liability insurance
- Injury or illness to your own employees — that’s workers’ compensation insurance
- Damage to your own building, equipment, or business property — that’s commercial property insurance
- Theft of client funds, employee dishonesty, or social-engineering fraud — typically a crime / fidelity bond or commercial crime policy
- Data breaches, hacking, ransomware, and privacy liability — generally cyber liability insurance (though some tech E&O policies bundle it in)
- Intentional, dishonest, fraudulent, or knowingly wrongful acts — excluded by virtually every E&O policy
Real claim scenarios
The missed disclosure
A Reno real estate broker fails to pass along a known drainage issue before closing. The buyer sues for the cost of repairs and lost value, alleging the broker’s omission. E&O responds to the defense and the negotiated settlement.
The spec that didn’t add up
A California design consultant’s drawings contain an error that forces a contractor to rework a finished section of a building. The client bills the consultant for the added labor and the schedule delay. E&O covers the claim for the consultant’s professional error.
The software that wasn’t ready
An IT firm misses a contracted go-live date for a client’s new platform, and the client claims lost revenue during the downtime. There’s no bodily injury or property damage — just financial loss — so general liability won’t respond, but E&O does.
Scenarios are illustrative; actual coverage depends on your policy terms.
How it’s priced
E&O premiums are highly individualized, because the risk lives in what you do, not just how big you are. Carriers underwrite to the nature of your professional services, your claims history, and the limits and deductible you choose. Two firms with identical revenue can pay very different premiums if one works in a higher-risk discipline. The factors that typically drive it:
- Your profession and the specific services you perform, including how much advice or money-handling is involved
- Your annual revenue or billings, and sometimes the size of the projects or transactions you handle
- The policy limit and deductible (retention) you select
- Your claims and loss history, plus how long you’ve carried continuous coverage
- The retroactive date — the further back it reaches, the more of your prior work is covered, which affects price
- Your state and regulatory environment, including any license or contract requirements specific to NV or CA
What to watch out for
- E&O is almost always claims-made: the policy that pays is the one in force when the claim is *made*, not when you did the work — so a gap in coverage can leave past work unprotected
- The retroactive date sets how far back your covered work reaches; reset or lose it (often by switching carriers carelessly) and you can quietly strip away years of protection
- If you cancel or retire, “tail” coverage (an extended reporting period) is what keeps you protected for claims that surface after the policy ends
- Report potential claims and circumstances promptly — late notice is a common reason claims-made policies deny coverage
- Defense costs are frequently paid *within* your limit, which eats into the money available for a settlement; confirm whether your limit is defense-inside or defense-outside
Professional Liability (Errors & Omissions) FAQs
Related coverages
Related reading
- Professional Liability Insurance for Food Beverage Businesses: What s Covered and What s Not
- Contractors Equipment Risk Management Tips for Commercial Real Estate Owners | Statement Insurance
- Professional Liability COI Requirements for Construction Contractors in Nevada California
- Business Interruption Insurance COI Requirements for Commercial Real Estate Owners in Nevada and California
We tailor Professional Liability (Errors & Omissions) for: Commercial Real Estate, Construction & Contractors.
Get Professional Liability (Errors & Omissions) coverage that fits
We’ll match your limits and endorsements to what your contracts actually require — across Nevada & California.