I'm mostly doing small commercial accounts in Jacksonville - restaurants, retail shops, small offices. Average monthly bills are $500-2000, so potential savings are usually under $5K annually. Is E&O insurance really necessary for this level of work? JEA doesn't require it for consultants and most of my clients are pretty casual about contracts. The insurance quotes I'm getting are $1,800-2,500 annually which would eat up a big chunk of my profit margin.
Do I really need E&O for small commercial accounts?
Marcus, even small accounts can have big problems. I had a restaurant client in Charlotte where I missed a demand charge issue that cost them $18K over two years. They sued me even though their monthly bill was only $800. Small businesses often have less cash flow buffer so they're more likely to go after anyone they can blame. The E&O coverage paid for itself on that one claim.
Wayne's right about small businesses being litigation-happy. Plus, you never know when you might land a bigger client who requires proof of coverage. MLGW started asking for E&O certificates even for small consultant work. I'd say get the coverage - you can usually find basic policies for under $2K if you shop around. Better safe than sorry in this business.