Calculator inputs
How to use this calculator
- Pick a currency, then choose your limit and deductible.
- Enter revenue, staff count, and years operating.
- Select risk, contracts, prior acts, and claims history.
- Add optional coverages only if you truly need them.
- Press Calculate to view costs and factor details.
- Download CSV or PDF for records and comparisons.
Formula used
This estimator uses a multiplicative factor model. A baseline premium is adjusted by pricing factors that commonly influence professional liability rates.
Annual Premium = Base × Limit × Deductible × Industry × Revenue × Employees × Experience × Claims × PriorActs × Controls × ContractRisk × Endorsements × Payment
- Base is a starting point for a small, low-risk firm.
- Limit and Deductible scale severity and retention.
- Revenue and Employees proxy service volume.
- Claims and Prior acts reflect historical exposure.
- Controls and Contracts capture process discipline and legal risk.
- Endorsements add a load, then convert to a multiplier.
Example data table
| Limit | Deductible | Risk | Revenue | Employees | Claims | Estimated premium range |
|---|---|---|---|---|---|---|
| 250,000 | 2,500 | Low | 80,000 | 1 | None | $400–$540 |
| 500,000 | 2,500 | Moderate | 250,000 | 3 | None | $900–$1,220 |
| 1,000,000 | 1,000 | High | 600,000 | 6 | 1 small | $2,200–$2,980 |
| 2,000,000 | 5,000 | High | 1,400,000 | 12 | 1 major | $4,800–$6,500 |
| 5,000,000 | 10,000 | Very high | 3,000,000 | 20 | 2+ claims | $14,000–$19,500 |
Pricing levers used in the estimate
The estimate starts with a baseline premium and applies multipliers. Coverage limit is the biggest lever: 250k = 1.00, 500k = 1.25, 1m = 1.60, 2m = 2.20, and 5m = 3.80. Deductible reduces premium as retention rises: 0 = 1.40, 1,000 = 1.15, 2,500 = 1.00, 5,000 = 0.90, and 10,000 = 0.80.
Revenue and staffing exposure signals
Revenue proxies service volume and client count. Bands step from 0.90 at ≤100k, to 1.00 at ≤250k, 1.10 at ≤500k, 1.25 at ≤1m, 1.40 at ≤2m, and 1.55 above 2m. Employees add about 3% each after the first, capped at 1.40 to keep teams realistic.
Experience, claims, and prior acts adjustments
Years in business reflects maturity: <1 year uses 1.25, 1–3 years uses 1.10, 3–7 years uses 1.00, and 7+ years uses 0.95. Claims history shifts outcomes: none uses 0.95, one small claim uses 1.10, one major claim uses 1.30, and 2+ claims uses 1.60. Prior acts adds 1.05 for one year, 1.10 for three years, and 1.20 for full retro coverage.
Controls, contracts, and optional coverages
Controls reduce expected frequency: basic is 1.00, standard is 0.95, and strong is 0.90. Contract severity increases with stricter terms: light is 1.00, typical is 1.06, and heavy is 1.14. Optional coverages add loads that become a multiplier: cyber +12%, employment practices +15%, vicarious +8%, defense outside limits +8%, additional insureds +5%. Selecting cyber plus employment practices creates a 1.27 endorsement multiplier, increasing the estimate noticeably.
Scenario walkthrough and budgeting range
With 1m limit, 2,500 deductible, moderate risk, 250k revenue, three employees, three years, no claims, one‑year prior acts, standard controls, typical contracts, and annual pay, the estimate is about 886 yearly. Use the 85%–115% range, roughly 753 to 1,019, for conservative planning.
FAQs
1) What does E&O insurance typically protect?
It commonly addresses allegations of negligence, mistakes, or missed deadlines in professional services. Coverage usually pays defense costs and settlements within terms, subject to exclusions, retro dates, limits, and deductibles.
2) Why do limits and deductibles change cost so much?
Higher limits increase the insurer’s maximum payout, raising premium. Higher deductibles shift more loss to you, lowering premium. The calculator models both using multipliers so you can compare scenarios consistently.
3) How can I reduce my estimated premium?
Consider a higher deductible, select an appropriate limit, strengthen controls, and avoid heavy penalty contracts where possible. A clean claims record and longer operating history often help. Remove optional coverages you do not need.
4) Why are revenue and employee count included?
They approximate the scale of professional activity. More revenue and staff can mean more engagements and more opportunities for errors. The employee factor is capped to keep the estimate stable for small organizations.
5) What is “prior acts” coverage?
It extends protection to services performed before the current policy start date, based on a retroactive date. Broader prior acts coverage can cost more because it includes older work where claims may emerge later.
6) Is this calculator a binding quote?
No. It is an educational estimate to support budgeting and comparisons. Actual pricing depends on your profession, geography, policy form, underwriting review, and carrier appetite. Always confirm terms and exclusions with a licensed advisor.
Notes
- Real underwriting considers services, contracts, geography, and licensing.
- Some professions require separate coverage terms or exclusions.
- Use the factor table to compare “what-if” changes quickly.