Professional Liability Insurance Frequently Asked Questions

Professional liability insurance, also called errors and omissions insurance or E&O insurance, helps protect your small business from mistakes in the professional services provided to customers or clients. Even if you’re an expert in your field, mistakes can happen. And if your client or customer thinks a mistake in the services your business provided caused them a financial loss, they can sue you. Professional liability insurance can help protect your business from lawsuits claiming:

 

Most insurance companies write a professional liability insurance policy on a claims-made basis, which means claims that occur while your policy is active can be covered. If you let your claims-made policy lapse before reporting your claim, your insurer can decline it.

 

Some professional liability policies can be written as an occurrence policy. This means that there will be coverage for losses that happen during your policy period, even if the claim gets reported after your policy expires.

Professional liability insurance cost varies because each business has their own unique coverage needs. Our customers paid a minimum average of about $76 a month for a standalone professional liability insurance policy.¹ Keep in mind that different industries may see higher costs for insurance because of the risk class associated with the work you do, as well as your location and business type.

 

Insurers use different factors to determine costs, such as:

 

Professional liability insurance is an important coverage that business owners who provide a service to a client or customer should have. You’ll want to get professional liability insurance coverage if you:

 

Find out more about who needs professional liability insurance.

Claims can only be covered under a claims-made policy if your policy is active, so business owners should buy insurance protection as soon as possible. Most small businesses will purchase professional liability insurance early on when creating a business. Typically, they maintain the same policy for their business to avoid any gaps in coverage.

With a professional liability insurance policy, you can file a claim any time during your policy period if the date of loss is after the retroactive date. You can file a PLI claim if a customer or client files a lawsuit against your business claiming that your business made errors, omissions or acted with negligence in the professional services you provided them, especially if it results in a financial loss.

Un Business Owner’s Policy (BOP) doesn’t include professional liability insurance coverage. A BOP only includes business property insurance, general liability insurance and business income insurance. You can add on professional liability insurance endorsement to your BOP policy to ensure that your business is better protected.

You may be wondering “What’s the difference between professional liability insurance vs. errors and omissions insurance?” Insurance companies often use the terms interchangeably, but they’re referring to the same coverage. Errors and omissions insurance is the same type of coverage as professional liability insurance. E&O insurance helps protect you and your company if a third-party claims that you or your business made a mistake in the professional services provided. Just like professional liability insurance, E&O insurance coverage can help cover the costs if a customer files a claim against your small business.

Professional liability insurance can help cover claims of errors or omissions in the professional services provided to a customer. It can also help protect your business from claims of:

 

Professional liability insurance can also help pay for:

 

After you cancel your professional liability insurance, you run the risk of being exposed to risks and unexpected expenses. Professional liability insurance is a “claims made” type of insurance policy. This means that you only get coverage for claims made while your policy is active and that occur after your retroactive date. Keep in mind that some client lawsuits come up years after the incident happened. So, if you don’t have insurance coverage, you’ll have to pay your legal costs out of pocket.

Yes, your legal fees are covered under a professional liability insurance policy. These covered costs include:

 

Professional liability insurance can help protect your business if a client sues you for a mistake or error made in the professional services you provided them. Keep in mind that professional liability insurance doesn’t cover all types of lawsuits and claims. You may need additional coverage endorsements added on to your PLI policy.

Yes, professional liability insurance helps cover defamation claims. For example, a competitor claims that your new advertisements are slandering their business and they sue you for damages. Whether it’s true or not, professional liability insurance coverage helps protect your company.

Professional liability insurance doesn’t cover all types of liability claims, like bodily injuries. For example, let's say someone sues your business after they slip and fall in your store. Your professional liability insurance coverage won't help. Instead, you'll need general liability insurance coverage to cover bodily injuries and property damage claims.

>

Yes, you can add on professional liability insurance to your existing business insurance policy with The Hartford. You can work with our specialists to get the right amount of insurance coverage for your business. Backed by more than 200 years of experience, we can help protect you with professional liability insurance for small business.

You can add managers as additional insureds on a professional liability policy. Adding an additional insured means that you’re extending your insurance coverage to another person or company. Be aware that the additional insured can file a claim with your insurer if a client sues them.

Sí, professional liability insurance for sole proprietorships can help if you get sued for mistakes in the professional services you’ve provided. Even if you don’t make a mistake, your clients can still sue you. Sole proprietors may want to consider having this coverage because unlike other businesses structures, like a limited liability company (LLC), your personal and business assets aren’t separated.

Without professional liability insurance for consultants, you and your business’ assets can be at risk of costly lawsuits from customers. You work hard for your clients, but if they become dissatisfied with the professional services you provide, you’re at risk of getting sued. Without professional liability insurance, you’d have to pay for expensive legal costs out of pocket if you’re sued for mistakes, negligence, misrepresentation, or inaccurate advice.

Sí, professional liability insurance for market research firms can help protect your business and your employees. If your clients claim that your analysis is wrong or causes them to lose money, they can sue your company. If your firm gets sued by a client, this insurance can help cover court costs, legal fees, settlement and judgment costs and personal injury for claims alleging libel or slander.

Professional liability insurance for interior designers is designed with your business in mind. When a mistake affects your client’s finances, your interior design firm can get sued for professional negligence. A single lawsuit could be devastating to your business. Professional liability insurance helps cover your business if mistakes happen.

Professional liability insurance for advertising agencies helps protect your ad agency from lawsuits if a client claims you made a mistake or failed to deliver what you promised. Lawsuits can happen for any reason at any time, and having the right coverage can help protect you and the business you’ve worked so hard to build. Even if you didn’t make a mistake, professional liability can help protect you and your employees from lawsuits claiming that you did. 

Whether you’re creating a new logo or building a website, you’ll need professional liability insurance for graphic designers. This coverage can help protect your company if you or your employees make a mistake in the professional services you provide to clients or customers. If your client or customer thinks a mistake made in your professional services caused a financial loss, they can sue you. This coverage may help pay for your legal fees and settlements costs. 

If your technology company provides professional services to any clients or customers, it’s a good idea to have professional liability insurance for technology professionals. This coverage helps protect your company from errors, omissions, mistakes or negligence in the services or products you provide. Without professional liability insurance coverage, you’d have to pay for lawsuits, legal fees and settlement costs out of pocket if you’re sued by a customer or client.

Accountants’ professional liability insurance is crucial for your business’ risk management plan. As an accountant or tax professional, you provide financial advice to your clients. If you or your employee’s financial advice results in a client losing thousands of dollars, your company is at risk of being sued for negligence, misrepresentation, or inaccurate advice. With professional liability insurance, you’ll have coverage you can rely on to help you cover these costly legal expenses.

If your company offers professional services to clients or customers, you’ll want to have professional liability insurance for small business. Without this coverage, you can be held liable if a customer believes your business made a mistake in the professional services you’ve provided. Even if it didn’t cause them financial loss, you can still get sued. This coverage can help pay for legal fees and settlement costs that you’d otherwise have to pay out of pocket for if you didn’t have insurance.

Professional liability insurance for home inspectors can help pay your defense costs if your customers file a lawsuit against you for negligence, misrepresentation, or inaccurate advice. If you or your employee make a mistake on the job and your business is held liable, your professional liability insurance can help pay your legal defense costs, helping your business avoid financial losses.

Professional indemnity insurance for auditors, also known as professional liability insurance for auditors, can help cover claims of negligence, misrepresentation and inaccurate advice. If an auditor at your company made a mistake that causes your client to sue you, your professional liability insurance can help cover your legal costs. Without this legal liability coverage, you’ll have to pay out of pocket for the claim, which can cause significant financial losses for your business.

Professional liability insurance for occupational therapists helps protect businesses from lawsuits related to the professional services given. This type of occupational therapy liability insurance can help cover liability issues in occupational therapy (OT) from claims like negligence, inaccurate advice, and misrepresentation.

Sí, professional liability insurance for nurses can help protect you from claims that you or your employee made a mistake in the professional services you provided to a  client. If you get sued, your insurance can help pay for the costs to defend your business in court. Even if you don’t make a mistake during treatment, you can still get sued and potentially be legally obligated to pay a covered claim. 

Professional liability insurance for fitness professionals can help protect your business from claims of negligence, misrepresentation, and inaccurate advice. If you or your employees make mistakes on the job, you’ll have the financial protection you need to keep your business running. For example, if your personal trainer gives advice during the fitness class and it causes an injury to a client, professional liability insurance can help cover your legal costs if you’re sued.

Professional liability insurance for engineers helps protect your business and design professionals from lawsuits related to the professional services given to a client. Despite your best efforts, mistakes can happen on the job. When the unexpected does happen and a client suffers a financial loss, they can sue your business for negligence or inaccurate advice. With professional liability insurance, you’ll have coverage to help you pay for legal costs, defense fees or settlements.

Sí, professional liability for architects is an important coverage to have in this industry. If your architecture firm makes a mistake that causes a client a financial loss, they can sue your business. Architect professional liability insurance can help cover claims of negligence, inaccurate advice or malpresentation. If your firm gets sued because of a mistake in the professional services provided, this insurance can help cover your legal fees, defense costs and settlements. 

Travel agents and tour operators work closely with clients to bring their travel plans to life. Mistakes can happen when you least expect it. That’s why it’s important to be protected with professional liability insurance for travel agents. Clients can also sue your business even if you didn’t make a mistake in the professional services that you or your employee provided. Without this coverage, your company would have to pay for costly claims and legal costs out of pocket.

Professional liability insurance for physical therapists can help protect you if a patient claims that there was an accident or issue with the services provided. Many states may require businesses to carry physical therapy liability insurance. Even if your state doesn’t require this type of business insurance, it’s still good to have. Without it, you may have to pay out of pocket for liability claims, which can devastate your business.