Solo Biz Soft Editorial Team Errors and omissions (E&O) insurance is another name for professional liability insurance, and for a consultant it covers claims that your advice, work or a mistake caused a client financial harm. It is one of the most commonly recommended policies for independent consultants specifically because the service you sell is advice and judgment, which is exactly what this coverage protects against claims about.
E&O and professional liability are the same thing
Insurers and industries use different names for identical coverage — “errors and omissions” is common in finance, tech and insurance-adjacent fields, while “professional liability” is the more general term. If you see either name on a policy, confirm what it actually covers rather than assuming the name tells you everything; see general liability vs professional liability for how this differs from general liability, which many consultants mistakenly think already covers this.
What it actually covers
E&O responds to claims that your professional work, advice or a mistake caused a client financial loss — a missed deadline that cost them money, advice that turned out to be wrong, or a deliverable with an error that caused downstream damage. It covers legal defense costs and settlements or judgments, which matters because defending even a baseless claim can be expensive on its own.
What it typically costs
For an independent consultant, a standard $1 million per-claim / $1 million aggregate policy commonly runs somewhere around $500 to $1,200 a year, averaging roughly $42 to $100 a month, though cost varies by the type of consulting, revenue, claims history and location. Higher-risk specialties (financial, technical or safety-adjacent consulting) tend to land at the higher end of that range.
Why many consultants buy it even when they feel low-risk
A large share of clients, especially larger companies and agencies, require proof of E&O coverage in the contract before work begins, regardless of how straightforward the engagement seems. Beyond the contractual requirement, legal defense costs alone from a disputed claim can exceed what a year of premiums would have cost, which is the real argument for carrying it even without a specific client mandate.
Frequently asked questions
Do I need both general liability and E&O?
Many consultants carry both, since general liability covers physical/property claims and E&O covers financial-harm-from-advice claims — they do not overlap.
Does E&O cover intentional wrongdoing?
No. It covers negligence and genuine mistakes, not fraud or intentional misconduct, which is typically excluded from any professional liability policy.
Can I get E&O coverage as a brand-new consultant with no claims history?
Yes, most policies are available to new consultants; pricing may start at a standard rate until you build your own claims (or claims-free) history.
More free tools: General liability vs professional liability · Freelance hourly rate calculator · All free tools
This article is general information, not insurance advice. Coverage and cost vary by provider, specialty and location — get a quote from a licensed broker or insurer before buying any policy.