While the high cost of Medical Malpractice Insurance for doctors can make headlines, in general, Errors and Omissions Insurance coverage is not very expensive for the amount of protection it yields. Many professionals pay $1500 a year or less for $1 million in coverage per occurrence. Depending on the type of business being insured, other insurance products, such as General Liability Insurance, can be far more expensive. Doctors in expensive areas and specialties with a high risk of a lawsuit may pay ten times that for the same amount of coverage, however.
How much Errors and Omissions Insurance costs depends on a number of factors: the type of business being insured, the amount of business revenue, and the loss history will all be taken into account when setting the rate.
Whether or not a specific business needs Errors and Omissions Insurance depends on the likelihood of a lawsuit. While, in theory, any professional can be sued, some may present more risk than others. A smaller business, such as a home-based freelance Web designer, may not generate enough revenue to justify the cost. Since most policies start in the $1000 to $1500 per year range a professional needs to balance that cost with the potential cost of a lawsuit due to his or her work.
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