Business Insurance
Professional Liability Insurance
Professional liability insurance, often called errors and omissions (E&O), protects your business from claims that your advice, services, or work caused a client financial loss or harm.
What is Professional Liability Insurance?
Professional liability insurance covers claims that your professional advice, design, or services caused a client to suffer a financial loss or other harm. It can cover legal defense and settlements even when you did nothing wrong.
It's commonly used by consultants, designers, accountants, architects, and other professionals whose work could lead to client disputes over quality or outcomes.
Key Benefits
Common Uses for Professional Liability
Advice or design error
A client claims your recommendation or deliverable caused loss
Missed deadline
Claims that a delay or non-delivery caused harm
Contract requirements
RFPs or contracts require E&O coverage
High-stakes services
Your work has significant financial impact on clients
What Professional Liability Typically Covers
Typically Covered
- Alleged errors or omissions in your work
- Negligence claims tied to professional services
- Legal defense costs, even for unfounded claims
- Settlements and judgments up to policy limits
- Claims from missed deadlines or non-delivery, in many policies
Typically Not Covered
- Bodily injury and property damage (general liability)
- Intentional wrongdoing or fraud
- Employee injuries (workers compensation)
- Data breaches, in most policies (cyber)
- Issues known before the policy start date
Coverage varies by policy and provider. Review policy terms carefully before purchasing.
How It Works
Getting covered is simple, and it is free for business owners.
Tell Us About Your Business
Answer a few questions about your operations, team, and the coverage you are looking for.
Compare Quote Options
See coverage options from providers that work with businesses like yours.
Get Covered
Choose the option that fits, get your certificates, and move forward with your work.
How Much Does Professional Liability Cost?
Many small service businesses pay between $500 and $2,500 per year for professional liability coverage. Premiums depend on your profession, revenue, contract sizes, and claims history. Fields with higher stakes, like architecture or financial advice, typically pay more. Comparing quotes from providers familiar with your profession may help.
What Affects Your Premium
- Profession and services offered
- Annual revenue and project sizes
- Coverage limits and deductible
- Claims history
- Years in business
- Client contract requirements
Who Typically Needs Professional Liability?
Frequently Asked Questions
Professional liability insurance also called errors and omissions (E&O) covers claims that your professional advice, services, or work caused a client financial harm. It pays for legal defense and settlements even when claims are unfounded or you believe you did nothing wrong.
Consultants, designers, accountants, architects, IT professionals, financial advisors, and other service providers whose work directly affects client outcomes. Many clients, RFPs, and contracts require proof of E&O coverage before engaging with a service provider.
General liability covers physical incidents bodily injury and property damage. Professional liability covers financial harm caused by professional errors, omissions, or negligence in your services or advice. Both are often needed, but they cover very different types of claims.
No. Professional liability covers unintentional errors and negligence not deliberate misconduct or fraud. Most policies also exclude bodily injury, property damage, and criminal acts. Coverage is intended for disputes about the quality, accuracy, or completeness of professional work.
Many small firms carry $1 million per claim, which is also the amount many client contracts and RFPs specify. Higher-stakes work, larger clients, or regulated professions may call for more. Your contract requirements and the financial impact your work could have on clients are the main guides.
It depends on the nature of the dispute. Claims alleging negligent work, errors, or omissions in your services are typically covered. Disagreements over fees, scope, or deliberate breach of contract generally are not. Policy language controls, so review how yours defines covered claims.
Premiums are generally deductible as an ordinary business expense. Confirm specifics with a qualified tax professional for your situation.
Coverage guides by industry: Contractors & Trades
Related Coverage Options
General Liability Insurance
Covers third-party bodily injury, property damage, and advertising claims.
Learn more →Management Liability (D&O)
Protects directors and officers from claims related to business decisions.
Learn more →Cyber Insurance
Protects against data breaches, ransomware, and cyber liability claims.
Learn more →Ready to Get Professional Liability Coverage?
Connect with providers that offer E&O coverage for your profession.