WEDNESDAY, MARCH 23, 2022
Professional liability insurance costs have been on the rise, and according to Willis Towers Watson, errors and omission (E&O) policy prices will continue to increase.
E&O insurance provides financial help when a business is sued after making a professional error. A simple mistake could cost a company thousands of dollars. E&O insurance may help those who provide services and advice in exchange for compensation.
Professional Liability Insurance Costs Expected to Rise in 2022
Willis Towers Watson reports that the cost of a professional liability insurance policy may rise throughout 2022. Large law firms could see rate hikes of 5 to 10%, according to Insurance Journal, while insurance for financial institutions may climb 15 to 50%.
Insurance policies poised for more significant policy premium increases include employment practices liability and cyber liability coverage.
Many factors contribute to continuously rising commercial insurance costs. Record-breaking inflation rates, an upward swing in the number and severity of natural catastrophes and ongoing social inflation have caused insurers to raise their rates.
E&O Insurance Premiums Depend on Several Criteria
Your E&O insurance premiums depend on a few factors specific to your business. A small business pays a median price of $713 per year for coverage. ,Your rates may vary depending on your annual revenue, the number of people you employ, the area where you do business, your industry and your claims history.
If your company filed claims in the past, you might pay significantly more for E&O insurance. In addition to this factor, the statistical risk that you’ll file a claim in the future is affected by your industry, which services you provide to customers and whether similar companies are prone to higher settlements and lawsuits.
Over half of small business owners pay $500 to $1,000 per year for their E&O insurance policy. Nearly 20% spend less than $500.
What’s Next for E&O Insurance Premiums?
Although E&O insurance premiums will go up during 2022, they won’t rise as sharply as cyber liability coverage, which is expected to increase as much as 150%.
Insurance underwriters expect that professional liability premiums will stabilize this year. For more information about how E&O premiums may change in the near future, contact US Risk LLC in Houston, Texas.
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