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⊸ Business Insurance⊸ Errors And Omissions Insurance

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Written by Nolan Wilson Updated on October 17, 2025 min read

Find the best errors and omissions insurance

Errors and omissions insurance is needed because no one is perfect. Errors, omissions, and mistakes happen. It’s part of doing business. Errors can happen when you offer products or services, consult, or give advice. Even though it's not legally required, you need errors and omissions insurance to protect your business. It’s a crucial liability coverage designed to protect businesses offering professional services from financial repercussions due to claims of negligence, mistakes, faulty advice, or unfulfilled promises.

At ThinkInsure, we can help you find the proper errors and omissions policy. We’ll compare quotes from the top insurers in Canada to find the best rates and coverage.

Key takeaways about errors and omissions insurance

  • Errors and omissions (E&O) insurance is a type of liability coverage that protects businesses offering professional services
  • E&O coverage provides financial protection for costs such as lawyer fees, damages, and settlements in case of an alleged error, mistake, or negligence.
  • Many professions either require or significantly benefit from E&O insurance, even if not legally mandated, due to the inherent risks of providing advice or services that could lead to financial loss or damage for clients.
  • E&O insurance typically does not cover claims for property damage, bodily injury, workplace injuries, data breaches, intellectual property violations, or criminal acts like fraud.

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What is errors and omissions insurance?

a couple having a business meeting

Errors and omissions insurance is a type of liability coverage that provides financial protection when claims and lawsuits are made against you for negligence (mistakes, errors, oversights, bad advice). It protects your business when it is sued because of errors made by you, your company, or your employees.

It protects businesses from liability exposure. The type of liability exposure depends on your profession and the work you do. Errors and omissions insurance has many other names, including :

An E&O policy outlines the type of liabilities you have protection against, your limits and how much protection you have if you cause damage or face a lawsuit. Your policy details are commonly specific to your industry and the products and services you offer. This type of coverage is advisable for any company offering professional services to the public (B2C) or other organizations (B2B).

Types of errors and omissions

Errors and omissions can happen in many different ways. They include:

  • Advice that caused a financial loss
  • Alleged or actual negligence
  • Claims from services provided
  • Damages caused by bad advice or poor services rendered
  • Personal injury, such as slander or libel
  • Marketing and advertising mistakes
  • Copyright infringement
  • Failure to complete work
  • Missing deadlines
  • Failure to fulfil contractual obligations

For example, a client follows your advice to change business operations practices. They implement your ideas, and productivity and sales take a significant dip. They do not get the desired results and suffer a financial loss. They may sue you to recover lost revenue.

Do I need errors and omissions insurance?

Errors and omissions coverage is a requirement for many professions. You may need this insurance to meet licensing requirements or enter client contracts.

Even if it's not required, all professionals are exposed to a certain level of risk. You give advice, enter into agreements, and are expected to meet certain expectations. Mistakes happen. Sometimes, these mistakes can cause financial loss or damage to your commerce partners and customers, which could lead to lawsuits against you.

E&O insurance protects you when you or your employees make mistakes. It also offers financial protection when false or disputed allegations are made against you. Without this, you would be financially liable in a lawsuit.

What professions need E&O insurance?

A long list of professionals either require or benefit from E & O coverage. Here’s a list of the most common professions:

  • Architect
  • Lawyers and paralegals
  • Insurance agents
  • Mortgage brokers
  • Accountants and bookkeepers
  • Consultants
  • Dental and medical care
  • Media
  • Financial advisors
  • IT and technology providers
  • Real estate agents
  • Travel agents
  • Home inspectors

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Jonathan Grandmond

2025-12-10

Star Rating Review2

Web Sales Broker Darryl Fardy, is such an easy person to work with, very informative and accommodating, he went over and beyond anything I would have expected to see to it my needs in this area were taken care of. I strongly recommend reaching out to this company and person for your insurance needs. Thanks again if your seeing this Darryl Fardy.

Ravipreet Singh

2025-12-09

Star Rating Review2

I have been with ThinkInsure for a long time. Jeff Plesman has helped me with Commercial Auto Insurance and have recommended me very good agents for other services as well. I would recommend Jeff for any commercial auto policies and ThinkInsure in general

Highspeed

2025-12-05

Star Rating Review2

Rep - Betsy Bannon Betsy was great to work with, patient, understanding and answered all my questions. Extra pleased and would recommend to anyone. Thank you for your help.

How does errors and omissions coverage work?

Errors and omissions (E&O) insurance can be added to an existing business policy, providing coverage for legal action due to alleged negligence, errors, or mistakes, with coverage amounts and deductibles varying by profession and insurer, and policy limits applying to the term, not individual claims.

Here’s a quick overview of how E&O policies work:

  • You can add errors and omissions to your existing business insurance policy
  • Errors and omissions coverage kicks in when a third party takes legal action against you, alleging negligence, errors, or mistakes
  • The amount of coverage you require depends on your profession and the services offered
  • You can increase your policy limits at an additional cost
  • Policy limits apply to the policy term, not individual claims
  • You must pay the policy deductible. This varies by insurer
  • You will not be covered if you knowingly deceive or are dishonest with clients

What does errors and omissions insurance cover?

You receive protection against various liabilities that could severely impact your operations, such as bad advice, libel, slander, and misrepresentation. It allows you to work without fearing a lawsuit or financial damages due to a mistake.

While the type and scope of coverage can vary, here is what E & O insurance protects against:

  • Poor advice: Offering wrong, misleading, or incorrect advice.
  • Negligence: Making an error while providing a service.
  • Libel and slander: Negatively impacting a client’s reputation.
  • Loss of documentation/materials: Losing a client’s documents, products, and raw materials.
  • Misrepresentation: Unknowingly providing data or information that is incorrect or misleading.
  • Delays: Failure to provide timely services and meet obligations because of a third party.
  • Breach of confidentiality: Information leaks.

What is not covered by E&O insurance?

Certain actions are omitted from E&O policies, including:

  • Fraud
  • Criminal acts
  • Blatant dishonesty
  • Price estimates and guarantees
  • Incorrect project estimates or projections
  • Data breaches (this is covered by cyber liability insurance)
  • Property damage and bodily injury (this is covered by commercial general liability insurance)
  • Wrongful termination
  • Employee discrimination
  • Data theft
  • Patent infringement
  • Intellectual property violations

How much does errors and omissions insurance cost?

businesspeople working together in boardroom

The average cost for errors and omissions insurance ranges. It can start as low as $500 annually and up. Expect to pay anywhere from $50 to hundreds per month. It is primarily based on your business type and how much risk you are willing to take on. Some enterprises have greater risk exposure than others, requiring higher E & O limits, which increases costs.

What are the top factors affecting errors and omissions insurance premiums?

The size, scope, location, and operations affect how much you’ll pay for coverage.

Here are the top factors affecting your premiums:

  • Company size
  • Industry
  • Location
  • Legal standing
  • History of lawsuits
  • How your people are trained
  • Professional certifications
  • Annual revenue
  • Your legal documentation
  • Coverage limits
  • Risk mitigation strategies

These can all affect costs. Review your options to determine the amount of insurance you need for your specific situation.

See our 5 star insurance reviews

ThinkInsure Google 5 star reviews

Rated 4.7 out of 5 stars in 1562 Google reviews

We help customers save more on insurance every day!

See all reviews

Jonathan Grandmond

2025-12-10

Star Rating Review2

Web Sales Broker Darryl Fardy, is such an easy person to work with, very informative and accommodating, he went over and beyond anything I would have expected to see to it my needs in this area were taken care of. I strongly recommend reaching out to this company and person for your insurance needs. Thanks again if your seeing this Darryl Fardy.

Ravipreet Singh

2025-12-09

Star Rating Review2

I have been with ThinkInsure for a long time. Jeff Plesman has helped me with Commercial Auto Insurance and have recommended me very good agents for other services as well. I would recommend Jeff for any commercial auto policies and ThinkInsure in general

Highspeed

2025-12-05

Star Rating Review2

Rep - Betsy Bannon Betsy was great to work with, patient, understanding and answered all my questions. Extra pleased and would recommend to anyone. Thank you for your help.

Errors & omissions insurance FAQs

Errors and omissions is an optional type of business coverage. However, it is required in most professions that offer services to the public or other businesses. Even if it is not required for your business, it is highly recommended that you protect yourself. If you or an employee makes a mistake or oversight, it could cause a financial loss for your customers, leading to a lawsuit.

This insurance is for any business offering advice or services. Whether you are a home-based business, SMB, freelancer, or large enterprise, E&O can help.

People make mistakes, and this coverage will protect you if your advice causes damage to clients or customers.

No. In most cases, you will require one or the other. Professional liability insurance and E&O insurance offer similar types of coverage. The term insurer’s use for this type of coverage can vary. Speak with your insurance expert to ensure you are getting what you need.

Errors and omissions insurance and professional indemnity (PI) insurance are interchangeable terms. They are essentially the same. They protect you from lawsuit costs when a customer believes you have acted in error. Or they believe you made a mistake when providing advice.

While both offer liability protection, directors and officers insurance is specifically for CEOs, leadership, directors, and officers who make decisions for your organization. E & O covers claims made against your company for the professional services you offer.

While these coverages may seem similar, there is a key difference between a surety bond and E & O. Surety bonds protect companies when they fail to perform to a certain standard as promised. E & O coverage protects when your services harm a third party.

It depends on your business structure and many other factors. Most policies start with $1 million in coverage and go up from there. Speak with your insurer about your needs to determine plan limits.

It depends on the parameters of your policy. You may or may not have protection. Check with your insurer before you choose an E&O policy.

Yes, this coverage protects you if you or an employee are negligent in providing services to a customer or client.

Like other business insurance products, you will have an errors and omissions coverage deductible. This amount can range from $2,000 to more, depending on your company size, coverage limits, and other factors. Speak with our team about your deductible options.

How do I prevent E&O insurance claims?

You can limit your mistakes by having good commerce practices. Every step to mitigate risk and eliminate mistakes can reduce the chances of a lawsuit. Use these tips to prevent E & O claims:

  • Communicate regularly: Stay in regular contact with your clients. Make sure you set clear guidelines and expectations, so everyone is on the same page.
  • Have a detailed review process: Set aside time to review all work and documentation before sending it to your clients.
  • Use realistic timelines: Do not promise timelines you cannot stick to. Build in some buffer time to ensure you are on time.
  • Have a system: Have an organized plan for working with clients, storing documents, and managing projects.

Errors and omissions claims examples

There are countless examples of mistakes professionals make during the course of doing business. Here are a few examples:

  • An accountant provided incorrect tax advice to a business, which the CRA audited. The company was fined because of your mistake.
  • An electrician incorrectly installed new wiring in an office building, sparking a small fire that forced the office to close for a week.
  • A financial planner advised clients to invest in a stock, which then plummeted, and they lost a large portion of their investment.
  • A graphic design firm creates a new logo for a startup. Months later, your company was sued for copyright infringement because the logo was too similar to another business's. You then get sued for the mistake.
business people meeting at conference table

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Nolan Wilson

Content Marketing Manager

Nolan is a content marketing manager and writer at ThinkInsure. He has 15+ years of experience in the insurance industry, working with brokerages and direct insurers to create compelling insurance content, specializing in auto, home, and commercial.

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