Professional liability insurance — also called errors and omissions (E&O) insurance — covers claims that your work caused a client financial harm. It’s not about whether you made a mistake. It’s about whether someone claims you did, and what that costs to defend and resolve. For anyone who provides professional advice or services, this is not optional coverage.
Who Needs It
If your work can be questioned, you need professional liability insurance. Common clients in our book:
- Attorneys — Legal malpractice coverage for solo practitioners and small firms
- Accountants & CPAs — Errors in tax preparation, audits, financial statements
- Consultants & management advisors — Broad E&O for advice that leads to client losses
- Technology companies & IT firms — Tech E&O for software failures, data breaches, project delays
- Insurance brokers — E&O for placement errors and coverage gaps
- Architects & engineers — Professional liability for design errors and omissions
- Healthcare practitioners — Medical malpractice alongside business liability
- Real estate professionals — E&O for transaction errors, disclosure failures
What It Covers
- Defense costs — attorney fees, expert witnesses, deposition costs, court costs. These alone can run well into six figures before a case resolves.
- Settlements and judgments — if a claim results in a payout to the client, the policy covers it up to your limits.
- Regulatory proceedings — some policies include coverage for regulatory or licensing board complaints.
Professional liability does not cover intentional fraud, criminal acts, or bodily injury (that’s general liability territory). We make sure your total coverage program addresses both sides.
Claims Made vs. Occurrence Policies
Most professional liability policies are written on a claims-made basis — the policy that pays is the one in force when the claim is filed, not when the work was done. This creates a tail exposure: if you let your coverage lapse or switch carriers without handling this correctly, you could be uncovered for old work. We manage tail coverage and retroactive dates explicitly at every renewal so this doesn’t catch you off guard.
Policy Limits & Structure
Professional liability policies are typically structured with a per-claim limit and an aggregate limit. A $1M/$2M policy, for example, pays up to $1M on any single claim and up to $2M in total for all claims in the policy year. Right-sizing these limits for your risk exposure — the scale of your engagements, your client type, your contractual requirements — is part of what we do upfront.
Many client contracts specify minimum professional liability limits. If you’re entering a new contract with a financial institution, healthcare organization, or government entity, bring us the insurance requirements section — we’ll confirm whether your current coverage qualifies or what you need to change.
Common Questions
Does my general liability policy cover professional errors?
No. General liability covers bodily injury and property damage. A client claiming your advice cost them money is a professional liability claim, not a GL claim. Firms that only carry GL and no E&O have a serious gap.
How much does professional liability cost?
A solo consultant or accountant might pay $1,000–$2,500 annually for a solid E&O policy. A mid-size tech firm or law practice with significant client exposure will pay more. Premiums vary significantly by profession, revenue size, and claims history. We’ll give you a real number quickly.
I haven’t had a claim in years. Do I still need it?
Yes — and the fact that you haven’t had a claim doesn’t mean you won’t. Most professional liability claims come from long-standing client relationships, not new ones. A dissatisfied client from two years ago can still file a claim today. Given what defense costs alone can run, the policy pays for itself the first time you need it.