By Jessica MartinezContributing Writer, Business & Finance, Encore Editorial
Things to know before buying this policy
- Claims-made policies, the standard form for E&O, only cover claims filed while the policy is active, so gaps in coverage matter.
- A retroactive date on your policy determines how far back covered incidents can reach.
- Tail coverage extends protection after you cancel a policy or close a business, and it is worth pricing separately.
The policy that has your back when a client says you got it wrong
General liability covers slips and property damage. Professional liability covers the other category of risk: a client who claims your advice cost them money, your deliverable had errors, or you missed a deadline that caused financial harm. Whether the claim is valid or not, defense costs alone can exceed $50,000 before a settlement is reached. That is what E&O is for.
Premiums scale with profession and revenue because both affect the likely size of a claim. An engineer designing a $20 million bridge carries more exposure than a marketing consultant at the same revenue. Coverage limits of $1M per claim and $1M aggregate are standard for most solo practitioners and small firms. If a client contract specifies a higher limit, you can buy up. For businesses that also handle client data, pairing E&O with a cyber liability policy gives more complete coverage. For the liability that GL handles, see the general liability calculator.
Figures this estimator uses
The premium here is a flat per-revenue rate multiplied by profession and coverage-limit factors. Below are the 2026 inputs the calculator above uses.
| Input | Rate or factor |
|---|---|
| Base rate | $1.10 per $1,000 revenue (floor $500) |
| Consultant / business advisor factor | 1.0 |
| Marketing or PR agency factor | 1.1 |
| IT / software / tech services factor | 1.3 |
| Accountant / bookkeeper factor | 1.5 |
| Real estate agent or broker factor | 1.6 |
| Engineer / architect factor | 1.8 |
| Attorney / legal services factor | 2.0 |
| Staffing / HR services factor | 1.2 |
| Graphic design / creative factor | 0.9 |
| $500K/$500K limit factor | 1.0 |
| $1M/$1M limit factor | 1.2 |
| $2M/$2M limit factor | 1.45 |