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Self-employed & tax / E&O Insurance Cost Calculator for Consultants

E&O Insurance Cost Calculator for Consultants

Put your professional liability (E&O) quotes side by side: the premium per month, as a share of revenue and per billable hour, cost per $100,000 of coverage, and what a year with a claim would cost under each.
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Leave at 0 to look at one quote only.

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Whole number, 0–4000

Only time you invoice. The consulting rate calculator works it out.

Quote A per month
$75.00
$0.75per billable hour
0.60%of revenue
$100.00Quote B per month
Quote A: premium · $1,000,000.00 limit, $2,500.00 deductible$900.00
Per $100,000 of coverage$90.00
A year with one claim · premium + deductible$3,400.00
Quote B: premium · $2,000,000.00 limit, $1,000.00 deductible$1,200.00
Per $100,000 of coverage$60.00
A year with one claim · premium + deductible$2,200.00
B costs more (less) per year · for 2× the limit+$300.00
Add to your hourly rate · $900.00 ÷ 1,200 billable hours$0.75

Compare like for like: the same claims-made retroactive date, defense costs inside or outside the limit, and any exclusions for your kind of work. A lower premium with a much higher deductible can cost more in a year with a claim.

See breakdown

How the E&O insurance cost calculator for consultants calculation works

  1. Enter the premium, limit and deductible from each quote

    Quote A: $900 a year for a $1,000,000 limit with a $2,500 deductible. Quote B: $1,200 for $2,000,000 with a $1,000 deductible.

  2. Compare cost per $100,000 of coverage

    A is $90 per $100,000 of limit; B is $60. B costs more but buys coverage more cheaply.

  3. Compare a year with one claim

    Premium plus deductible: A is $3,400 and B is $2,200. The cheaper premium isn't cheaper if you have a claim.

  4. Build the premium into your rate

    $900 over 1,200 billable hours is $0.75 an hour, 0.6% of $150,000 of revenue.

Worked example. A consultant billing $150,000 over 1,200 hours compares a $900 quote ($1,000,000 limit, $2,500 deductible) with a $1,200 quote ($2,000,000 limit, $1,000 deductible). Quote A is $75 a month, $0.75 per billable hour and $90 per $100,000 of coverage; Quote B is $60 per $100,000, and a year with one claim costs $2,200 under B against $3,400 under A.

E&O Insurance Cost Calculator for Consultants FAQ

How much is E&O insurance for a consultant?

There is no public price list: insurers price each policy. It depends on your field, revenue, claims history, the limit and deductible you choose, and the state. Get two or three quotes and compare them here on cost per $100,000 of coverage and on a year with a claim.

What is E&O insurance?

Errors and omissions (E&O) insurance, also called professional liability insurance, covers claims that a mistake, oversight or negligence in your professional work caused a client a loss. The NAIC describes it as coverage tailored to each profession, for example accountants, architects, engineers, lawyers and real estate agents. It usually pays your legal defense as well as a settlement, up to the policy limit.

How much coverage does a consultant need?

Start with what your client contracts require: many name a minimum limit per claim. Check your contracts before you choose, then compare quotes at that limit and one step higher.

Claims-made vs occurrence: what is the difference?

A claims-made policy pays only if the claim is made while the policy is in force, for work done after the retroactive date. An occurrence policy covers an event that happened during the policy period, even if the claim comes years later. Most E&O policies are claims-made, so check the retroactive date on each quote and keep it when you switch insurers.

What is tail coverage?

Many claims-made policies offer an option, often called tail coverage or an extended reporting period, to report claims after the policy ends for work done while it was active. It matters if you retire, close the business or move to a policy that doesn't cover earlier work. Terms and prices vary, so ask each insurer and add the cost to the quote you compare.

Should I add insurance to my consulting rate?

Yes, like any business expense. The calculator shows the premium per billable hour so you can include it in your rate.

Sources: NAIC: Glossary of insurance terms (claims-made form, errors and omissions liability, deductible)

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