/ BLOG

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.

Get Free Online Quotes and get coverage instantly

The coverage you need for your business.

Business insurance is divided into different policies. We offer 4 types so it's easy to design the coverage that fits your business.

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Let's find

The coverage you need for your business

Professional Liability Insurance

Get a quote

General Liability Insurance

Get a quote

Business Owner’s Policy (BOP)

Get a quote

Workers Compensation Insurance

Get a quote

Love it
Hanna R.
1708272180
Every year, BizInsure is my go to for general and professional liability insurance! Thenrates are unbeatable.
Calandra K.
1708044666
The agent was quick and efficient in generating a quote for my needs.
Theresa F.
1707895796
I enjoy working BizInsure they always answer all my questions and make sure i have the correct coverage for my business.
Prompt and professional service from Biz Insure. Thanks Leslie and Liza!
Bev G.
1707524454
Very easy to sign up for insurance.
Great company
Brown G.
1706896003
Fast and efficient!
Kim C.
1706746693
عالی
alireza J.
1706727364
It was great being able to get a policy that suits my company's need in less than 30 minutes. They were vey thorough. Very competitively priced.
Lynette C.
1706621476
I worked with Andrea for another start up business. She was very knowledgeable and help me pick the correct policy. Amazed at how quickly the process went.
Representative was very kind, helpful, and educated me well. I appreciated today's prompt service with confirmation that I was satisfied with what was provided to me.
Tina P.
1706224051
Great company for.your low cost business insurance needs.
constantin T.
1706156911
Staff was very fessional and friendly. I was able to get a quote and move forward within 20 minutes.
Pebbles S.
1706126428
Wonderful
Complete C.
1705788054
MUY BUENO
Super easy process.
Ashley G.
1704830227
It’s very easy to understand and at a very reasonable price.
Mary M.
1703780096
Professionalism, Quality, Responsive and budget friendly
B D
1703029371
Great rates, easy to understand and select appropriate coverage, can get in a jiffy
Brie C.
1702775397
I have been a customer of BizInsure for a few years now and I love it. There customer service is awesome and the prices are affordable.
Danyale W.
1702132165
Quick easy experience! The rep was knowledgeable & pleasant. Customer care was awesome to respond and clarify my concerns.
Kathy Ann A.
1702059151
bizinsurance makes purchasing Business Insurance...SIMPLE!
Andrea W.
1701380391
Great quality of Service ,faster and convenience way to pay at most. Thank you for your Service to my Healthcare Facility .
Quick and easy!!!!
Terry
1701319042
Great service! Easy process and very informative representative. Andrea was great and very patience with our process. I would recommend using them!!
Terrance R.
1700848536
Always and easy process. Thanks!
Gerald S.
1700244544
Renewal was quick and easy online
Angelita K.
1699752900
I had a great experience working with Andrea from BizInsure. She was extremely knowledgeable, helpful, and responsive throughout the entire process. She guided me through the different options available and helped me find the perfect home care professional liability insurance policy that suited my needs. Her professionalism and expertise made the entire experience smooth and hassle-free. I highly recommend working with Andrea and BizInsure for all your insurance needs.
Juliette S.
1699032636
Easy to submit an application and to get quotes
Simone S.
1698775217
I had the most pleasant prompt and professional experience of my life with Bizinsure. Everything was completed in record time, at an unbelievable cost…and my certificate of Insurance was promptly emailed to me. Most of all it was effective immediately. No hassle no back & forth, just great service highly recommend to all small businesses.
Marcia S.
1698407456
Excellent
advanced U.
1697824466
Great service. Very professional and cordial. Thanks
Jeremiah U.
1697064641
BizInure has been a great company for our insurance needs. I wish customers services was 24/7, that would make it a five stars
Novilette L. J.
1696828014
js_loader
Google Rating
4.7
Based on 242 reviews
×
js_loader