Getting my E&O insurance set up and not sure how much coverage to carry. My audits typically involve commercial accounts with $5,000-$50,000/month in utility spend. What do other auditors carry?
How much E&O coverage do you carry?
I carry $1 million per occurrence, $2 million aggregate. It costs me about $1,800/year through Hartford. Most of my clients require at least $1 million as a condition of the engagement. A few of my larger corporate clients require $2 million per occurrence. The premium is a reasonable business expense and it gives you credibility when clients ask about insurance during the sales process — which they will.
$1M/$2M is the standard for our profession. The risk we're insuring against is primarily errors in our analysis that cause the client to lose money — for example, if you recommend a rate change that turns out to be more expensive, or if you miss an error that results in the client losing a refund opportunity. The likelihood of a claim is low if you do careful work, but the insurance is essential both for actual protection and for client confidence. I wouldn't take on any client without it.
$1M/$2M it is. Going to get quotes from Hartford and a few others. Thanks for the guidance.