For those working in industries where they advise others, the risk of making a mistake can be fatal to your business. Your advice can impact another person’s livelihood and, if you make a mistake or your client perceives that you made one, it could be costly. The risk of being sued based on how others feel your advice impacted them is great. This is where professional liability insurance comes in.

Professional Liability Insurance, also sometimes referred to as Errors and Omissions (E&O Insurance), is protection for your business from claims of negligence that are related to a professional service you provide.

How does professional liability insurance work?

Professional liability insurance provides protection when a business or business owner is sued for negligence resulting in their work not meeting their client’s expectations or needs.

For example, imagine that you are a consultant and shortly after giving your client advice they experienced financial losses. They could sue you or your company for their losses, claiming that your advice is the reason they experienced the loss. That lawsuit could result in a costly expense on your end. This coverage would help to cover those costs.

Who needs professional liability insurance?

Any business that provides a professional service, such as offering advice, would benefit from having professional liability insurance including:

  • Consultants
  • Attorneys
  • Engineers
  • Architects
  • Counselors
  • Accountants
  • Real Estate Agents
  • And more…

Basically, if you regularly give advice to your clients or offering professional services directly to your clients, you will want to have professional liability insurance.

Some states require specific industries or professions to carry professional liability insurance. You also may find certain contracts require you carry professional liability insurance.

What type of coverage does professional liability insurance offer?

Professional liability insurance offers a variety of coverages including coverage for alleged or actual negligence and defense costs. These are risks that are typically not covered under your general liability policy. Professional liability insurance could also include coverage for claims that occur related to services provided in the past up to a certain time period.

It is important to remember that professional liability insurance doesn’t cost claims of bodily injury, property damage, work-related injuries or illness, and data breaches. These are covered by different types of insurance. Discuss these risks with your independent insurance agent to evaluate your risk and make sure you’re including the right types of insurance in your insurance package.

How much does professional liability insurance cost?

Every business is different and there are many factors that go into the cost of professional liability insurance. These factors include your industry or profession, location, coverage limits, number of employees, years in business, and more. Your claims history also plays a large part in determining your cost for professional liability insurance.

To learn more about your personal risks or get started with a professional liability insurance quote today, contact our licensed agents at 844-GANNONS or email us at