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Does a Sole Proprietor Need Professional Liability Insurance?

Aug 11, 2021 · 5 minutes to read

A business person in the office sitting in a chair.

There are many benefits to working as a sole proprietor. Establishing your business is often simple, as there’s just one person you need to worry about (yourself!). You also have the flexibility of being your own boss and the advantage of getting to keep all the profits.

This is not to say that running a business as a sole proprietor is easy. You still face many of the challenges that other small businesses do, but without help from anyone else. Everything is on you, and if something goes wrong it’s your responsibility alone to fix the problem.

So what happens when a client is unhappy with the work you’ve done for them? If a mistake you’ve made or a deadline you missed has caused them to lose money, they may decide to seek compensation through a lawsuit.

This is where sole proprietors, who offer professional services or advice may need support from Professional Liability insurance to help protect their livelihood and professional reputation.

What is Professional Liability insurance?

Professional Liability, also known as Errors and Omissions (E&O) insurance, protects your business against claims of negligence, misrepresentations, or mistakes. Professional Liability claims are typically made by clients who allege some form of financial damage as a result of your services, products or employees.

This form of coverage helps protect sole proprietors and other small businesses against claims of:

  • Error or mistake
  • Omission
  • Negligence
  • Breach of contract
  • Undelivered services
  • Missed deadlines

These types of claims are common across a variety of industries and occupations, from architects to yoga instructors.

How Professional Liability insurance can protect sole proprietors

Small businesses of all sizes purchase Professional Liability insurance to protect business. However, sole proprietors may especially benefit from the protection that a policy can provide.

When you work alone, as sole proprietors do, the responsibility for all parts of the business fall on your shoulders. This sometimes means that business liabilities become personal liabilities. Lawsuits targeting your professional reputation call you out by name and legal expenses can quickly diminish your savings (both business and personal).

Professional Liability insurance can help remove some of these burdens. A policy helps you defend yourself in court by paying attorney’s fees, court costs, settlements, and judgements. This creates a safety net for your financial accounts, helping you stay in business and protecting your personal savings. This protection also extends to meritless claims, which can be just as costly to defend against.

What types of sole proprietors might need this insurance?

Professional Liability insurance is typically purchased by individuals and small businesses who provide professional services to clients or customers. This typically includes common white-collar occupations like accountants, lawyers, engineers, and consultants.

However, there is a wide range of professionals who might need Professional Liability insurance. People like personal trainers, home health care workers, and even event planners may also consider having a policy.

If you’re unsure if Professional Liability insurance is right for you, it may help to think about the type of work you do. If it involves any of the following, you might want to consider a Professional Liability policy:

  • You offer clients or customers specialized services.
  • You give your clients or customers advice that they rely on the make decisions
  • You represent your clients’ or customers’ needs on their behalf

Is Professional Liability insurance ever required by law?

In some instances, sole proprietors may be required by law to have a Professional Liability policy.

Some states require sole proprietors and other small business owners in certain professions to have Professional Liability insurance before they can work in the state. Additionally, some professional associations require their members to have minimum levels of coverage to become licensed or otherwise practice their profession.

Is Professional Liability the only protection that sole proprietors may need?

Depending on your occupation, there may be other risks sole proprietors face that Professional Liability insurance does not cover. Other common forms of insurance that you consider include:

  • General Liability – Protects you against any claim by an outside party regarding injury or damage to their property. In these instances, your policy will cover your legal expenses as well as your cost to replace or remedy the situation.
  • Business Owner’s Policy – A convenient and affordable way for small business owners to protect against several of their most common exposures. These policies combine General Liability insurance with other types of coverage, such as business interruption and business property damage.

Find Professional Liability insurance for sole proprietors

Professional Liability insurance can help sole proprietors protect their business, so they can focus on running it instead. With that in mind, BizInsure has made it simple for sole proprietors and small business owners of all types to find the coverage they need.

We’ve removed the hassle from buying business insurance, by using technology to simplify the process and offer competitive pricing from top-tier insurers. You could have a Professional Liability policy in 10 minutes (maybe even less!) to help protect your growing business.

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00:22 29 Mar 23
Very professional people. Prompt reactions always
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16:06 28 Mar 23
BizInsure has really come through for me on some really hard to place risks. Andrew takes the time to understand the risk and work through how we can make it work, rather than looking for ways to say no. Thank you for your help!
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Worked with Tevin. Amazing customer service. Was very patient with me in figuring out the best insurance coverage for business. Thanks Tevin for making it easy.
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No complaints, Always a fast response when a need arises.
Dan F.
13:56 10 Mar 23
Very good information patience was shown. Much help from Kaled, satisfied with the amount of insurance and good coverage. Affordable is what you need with starting a small business until you grow. Old saying is go as you grow.
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21:53 20 Jan 23
Professionals at what they do! easy to navigate and very good people to lead to to the best coverage!
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20:37 17 Jan 23
I have been shopping for business liability insurance for several months. I am happy to share that BizInsure ranked #1! The representatives were polite, patient, and empathetic. They accomplished what most companies struggle with achieving: they did what they said they were going to do, they were on time, and they had empathy. They delivered a policy for 25% less than the closest competetor, and even included $50k of cyber security at no additional cost! I only write reviews when I receive exceptional experiences- highly revommended; keep up the great service BizInsure!P.S. I own a professional referral service in Hawai'i and I am going to see if BizInsure offers an affiliate program.Aloha!
John S.
05:51 23 Nov 22
They respond quickly and give you quotes immediately ...
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23:55 09 Nov 22
The agent that I spoke to was very experienced and could tell that I was new at this and was very understanding and took the time to explain everything to me.
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00:04 15 Oct 22
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We’re very happy with BiInsured LLC. VERY AFFORDABLE
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Jasmine Q was on the spot professional, she knew where to direct me and explain to me my concerns and request; she delivered my personal information within minutes of me asking policy questions.That young lady is a true ROCK STAT!!!
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23:09 15 Aug 22
For a small non-profit, the package I was given was affordable. The representative was polite, patient, understanding, and knowledgeable.
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Asked for a specific venue to be place on our certificate of insurance and it was done within one business day. Yay! Bizinsure!
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The process was fast and easy and the professional staff was very knowledgeable with any questions that I had and ready to help
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Friendly agents. Timely replies. Fair pricing. This is a good fit for my business! Thank you, Noah, for all your help.
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Noa made sure I had all the information I needed for a first time business owner . He helped me understand what I needed to secure a quality policy and he was super helpful when explaining how the policy would serve its purpose to my company. I was very satisfied and had an Awesome experience, I think people like that make the company look good!
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I was in need of WC, GL and PL coverages for my business and was able to shop, discuss, confirm and purchase all the coverages in two days! This was a great experience, especially when "Time is Money". Noah Bowman was very professional and knowledgeable. Thanks!
AmeriCreed 1.
15:42 23 Sep 21
MOVING FORWARD, I WILL BE SENDING ALL OF MY BUSINESS TO THIS COMPANY !!!! Incredible customer service!!! Thanks
THEODORE W.
19:49 09 Sep 21
Their representative clearly explained different kinds of policies to help me select the one appropriate for my needs and then helped me enroll by phone painlessly. By the end of the call, I had a policy in place.
Dissent D.
22:21 02 Sep 21
Eugene was Awesome!!!!
Lakesha G
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Excellent solution for writers and authors professional liability policy as well as coverage for copyright and trademark infringement. Service was prompt and excellent.
Lane
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Done in less than an hour!
William O.
00:30 02 Jun 21
Efficient, and great value. The agent was able to give us a quote and a new policy in a short period of time. Thank you
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20:30 24 May 21
I had a great experiencing obtaining several of my insurance needs as a landscaping company here in Northern Colorado. BizInsure's team took care of my needs and was very responsive to help with paperwork needed to secure a potential client account!
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Very efficient they were able to help me out with my request promptly....highly recommend this companyI am very happy to have them
Elba P.
18:50 26 Apr 21
I need a help getting errors and omissions insurance along with general liability. Jose was very friendly informative and was very patient with me during the process. He found me some of the best rates for the coverage that I needed. Highly recommend
Casper M.
19:51 20 Apr 21
I had numerous conversations with several business insurance agents over a month's time. I also had several conversations confirming the policy inclusion/exclusions and asked many questions. My BizInsure agent was professional, knowledgeable and most important—detail oriented. Even after having an initial conversation a month earlier he knew and *remembered* all my personal/professional insurance needs. When I asked for additional information on the third call he was able to provide me with details very quickly. He was also VERY patient. That is a big plus in my opinion. It illustrated a high level of respect for my needs. I also found when I called back and asked to talk with the initial agent, the person who answered the call was able to get in contact quickly and my agent responded and returned the call within 5-10 minutes. The transaction was smooth, and I think it's a good sign should I ever need to make a claim. I highly recommend BizInsure.
Poetic F.
21:00 07 Apr 21
The rep was extremely helpful actually lowered my quote and made sure I was covered to fit my needs with my growing business! 5star!!
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19:04 16 Mar 21
Excellent service and prices.
Cassiopée V L.
23:13 09 Mar 21
Mr. Daniel Scott was very responsive to my professional needs.
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17:38 18 Feb 21
Eugene deserves a raise! First time purchasing insurance and he made the process so simple for me. His patience and attention to detail left me feeling confident in my decision to choose BizInsure. Gracias Eugene!
Esined P.
23:32 17 Feb 21
The customer service provided by Jose was outstanding. He explained everything in a very clear/logical way and answered all of my questions. After providing all the information to obtain general liability insurance, Jose sent me the declaration page of the insurance for review. All of the information matched what I provided over the phone and there were no typos. The next day I called back to purchase the insurance which was easy and fast. Overall, my experience with BizInsure including the customer service by Jose exceeded my expectations.
Joe W.
03:29 12 Dec 20
Hiscox/BizInsure made getting Liability Insurance very easy and reasonable.I expected it to be a long and complicated process and it was a nice surprise that they made it so uncomplicated. Thank you. Lisa
Lisa W.
21:51 24 Nov 20
Eugene was incredible. I called 4 other brokers before him who were impossible to get any help.
rhonda H.
23:26 12 Nov 20
Very quick to get in touch with you and good with follow up. Had some trouble retrieving my quote to log into my account initially but Daniel assisted me and the changes were made to get me into my account. Great value for the money.
Fran S.
16:34 20 Sep 20
Very happy to be insured with this company. Professional, Timely, very helpful. Thank you Juan, you made it so much easier for me to understand.
Aileen D.
19:55 15 Sep 20
This company responded when I needed them to respond while facing a deadline. They are an excellent choice for business Insurance.
Michele H.
01:52 12 Sep 20
Jose Quintero took such great care of me and was very patient explained everything I did not understand and got me set up quickly. Fabulous customer service
Christina R.
02:41 27 Aug 20
I can't say enough good things about Daniel Santos kind and effective communication skills as an insurance agent. Daniel was so pleasant, friendly and efficient with helping me obtain insurance as a teacher. If I were to give Daniel a grade, he has earned an At . He made the process easy to understand, it was far easier than what I anticipated. Nancy S.
Nancy S.
00:47 26 Aug 20
I was in need of professional liability insurance for my sole proprietorship. A friend referred me. Everythng was quick and simple and AFFORDABLE!
hope J.
20:31 25 Aug 20
If you need Private Home Care Provider insurance for your company, BizInsure, LLC can get it for you!
Pamela C.
16:45 24 Aug 20
Great and fast service!!!! The representative was very professional!!!!
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19:51 14 Jul 20
I was tryi9ng to find commercial liability insurance for my new comp-any and BizInsure was easy to use and very affordable which is great for me as a new business.
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19:01 14 Jul 20
Great service insurance prices are great for professionals looking to get insurance for businesses....
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22:34 22 Jun 20
The provided very professional service and made the process easy.
Paul R.
21:51 04 Jun 20
Bradley Hoyle from the Biz Insure team was excellent to work with. Everything was quick and smooth. Great service, much appreciated!
Kristene S.
02:03 04 Jun 20
Anthony Spencer was great!! Very quick response time!! He was very Professional! I would suggest him because he helped me find a affordable rate and explained all the technicalities..
Fre H.
16:38 28 May 20
I was referred to Bizinsure by a industry trade group that I am a member of. It was easy to get a quote online and then received excellent customer service from Bradley H. to complete my policy purchase over the phone. I have shared this company information now with other business owners for their policy needs.
Dawn T.
22:11 08 May 20
This company was very precise with explaining services and made sure I chose the right business insurance coverage, great customer service at purchasing.
Nekeisha B.
01:30 05 May 20
Amazing
Jasmine Q
14:31 02 Dec 19
Trish is the most patient, professional and understanding insurance agent I’ve ever worked with. Trish has taken care of all my business insurance needs for the last couple years. I am really happy that I found an insurance agent that I know will take care of me & all of my concerns. I feel like a valued customer & I appreciate the great customer service that I get every time!!THANK YOU!
Dr. Youssef C. A.
17:21 14 Nov 18
Tricia helped me get insurance for my business. The task of obtaining a quote was really starting to frustrate me until I was referred to BizInsure through a different agency. Tricia got me a quote fast, and even took a down payment over the phone and issued the proof of insurance the same day. a+ service, would do it again in a heartbeat!! Thank you!!
Josh M.
18:07 22 Jun 18
BizInsure was a great find! I did not have to fill out applications, and Tricia was able to quote and bind business insurance for me within half an hour.
Allison Y.
17:28 21 Jun 18
Started doing business again and needed a policy fast. Ramez was reasonable, helpful and the rates are OK. Buyer beware? Sure, for me it turned out OK this time. Worth a call.
Mark W.
23:42 13 Nov 17
Great customer service. I've been very inpressed with my dedicated representative that had helped me navegate my insurence needs. Thanks so much!
Graham B.
22:12 23 Jun 17
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