What does Professional Liability insurance cover?

Also known as Errors and Omissions insurance, Professional Liability insurance is designed to protect your business against claims for negligence, misrepresentation or mistakes. As a professional, you are exposed to the potential risk of clients making allegations for financial damages due to the services or products your business provides.

For certain kinds of professional practices like medical and legal, Professional Liability insurance is required by law. It is important to remember that this type of insurance is not part of a General Liability insurance policy.

In the event that a dissatisfied client sues you due to an error you or an employee has made, you can call on your professional liability insurance to assist you with the costs associated with recruiting an attorney and settling any cases. 

Professional liability insurance is designed to cover service providers against claims of alleged or actual negligence that emerge during the course of delivering professional services; for instance, making a minor error that has significant consequences, offering incorrect advice, or failing to deliver a service. Professional liability insurance coverage covers defense costs and damages costs to the level outlined in the policy, irrespective of whether an error was made.  

For instance, let’s say you’re an accountant and your client claims you filed incorrect taxes, which led to a loss of money. In such a situation, you can draw from your professional liability insurance to assist you to cover legal and settlement costs.  

Professional liability insurance typically covers the following:  

Errors and oversights 

Sometimes a basic error can lead to the loss of a lot of money. If a client sues due to a mistake made by your business, you can use your professional liability insurance to pay for legal defense costs.  

Undelivered services 

If you have promised that you will deliver a certain service in a certain way and fail to do so, your client may sue—especially if the failure to live up to expectations has a negative impact on your client’s business.  

Negligence accusations 

If you are accused of negligence—for instance, on the grounds your work did not meet industry standards—you may be hit with a professional liability lawsuit. 

Missed deadlines 

If a service professional fails to meet a deadline, the client may encounter serious issues and expenses. Professional liability insurance can protect you if a client sues you for failing to deliver milestones on time.  

What does professional liability insurance not cover? 

Customer injuries or property damage 

In the event a customer sustains an injury while visiting your premises or you damage something on the client’s site, you will need general liability insurance to assist you to contribute to any medical expenses or repairs. General liability insurance will also cover you for any legal expenses if the customer decides to prosecute. 

Employee injuries 

In the event workers experience work-related injuries or fall ill, their medical expenses will be covered by workers’ compensation insurance. 

Damage to business property 

Any items that are stolen, damaged, lost or destroyed are covered by the business owner’s policy (BOP). 

Employee discrimination lawsuits 

Employment practices liability insurance (EPLI) is designed to cover any legal costs associated with wrongful termination, harassment, or discrimination.  

Vehicles used by a business 

It is a legal requirement for business-owned vehicles to be covered by commercial auto insurance. As such, you should ensure that any leased or personal vehicles that are used by a business are covered by hired and non-owned automobile insurance. 

Contingent bodily injury 

Contingent bodily injuries are any injuries that a customer or client sustains that are indirectly linked to your professional service. To cover contingent bodily injuries, you will need product liability insurance. 

How Professional Liability Coverage differs from General Liability? 

Both general liability insurance and professional liability insurance are designed to protect your business against the liabilities small businesses may encounter; however, they are designed to address different types of lawsuits. Depending on the risks associated with your business or service, you may need to purchase one or both policies.  

What is general liability insurance? 

General liability insurance covers the basic lawsuits that all businesses can encounter at any time. Essentially, you will need it if a third party (someone who doesn’t work for your business) decides to sue you for one of the following reasons:  

They incurred bodily injuries while on your commercial premises 

You caused some form of damage to their property 

Your advertising strategies have caused them some form of injury (copyright infringement, misappropriation, slander, libel).  

What does general liability insurance pay for? 

General liability insurance pays for any legal expenses you encounter when responding to a third-party lawsuit. Examples of costs could include court costs, attorney fees, judgements or settlements. Any small business owner in any organization or field can encounter a general liability claim. It is for this reason that this policy should form the very foundation of your protection strategy.  

Professional liability and general liability are associated with different risk exposures. General liability insurance will assist you with any lawsuits that emerge due to a visitor having an accident on your property, while professional liability insurance will assist you with any lawsuits that emerge due to accusations of professional mistakes. 

Professional liability covers financial damages, while general liability covers physical damages. 

In some cases, a general liability policy may incorporate some form of products-completed liability insurance that is designed to cover professionals who own retail, construction, manufacturing, and other service businesses. This is designed to protect you from any lawsuits related to completed works that cause some form of physical harm to another party. While this may appear to be the domain of professional liability, the yardstick lies in the term physical damage. Professional liability insurance is limited to financial damage.  

Which policy makes sense for your business?

In most cases, you will need both professional liability and general liability insurance to ensure you are protected against both physical damage and financial damage. This is most certainly the case if you operate in the professional services industry or rent/own commercial property that is accessible to the public. 

It can be possible in some cases to operate without either policy in place; however, it is a very risky route to take and not advisable. Someone could have an accident in your building or claim you did not fulfil the claims of a contract at any time. 

Who needs professional liability insurance?  

Professional liability insurance, which is also referred to as professional indemnity or errors and omissions coverage, covers small business owners or professionals who leverage their knowledge to make a living. Just some of the specialists who should consider purchasing professional liability insurance are as follows:  

  • Architects, designers, and engineers 
  • Real estate brokers 
  • Financial consultants 
  • Accountants and bookkeepers 
  • IT professionals and programmers 
  • Marketing and advertising professionals 

 

Why should you have Professional Liability Insurance? 

Commercial General Liability (CGL) insurance offers sufficient protection for the majority of small businesses. The clauses contained with CGL policies can be adjusted in line with your requirements; however, even the most basic policy can protect you against liability for things such as customers slipping on a wet floor or getting ill after eating your food. However, it is important to note that CGL does not protect customers against rendering or failing to render professional services. For that, you will need professional liability insurance. 

What actions could result in a Professional Liability claim?

Below are some examples of different professions and the potential type of claims that could be covered by a Professional Liability insurance policy.

Example 1- An IT engineer builds a faulty website for a client that crashes just before they launch a new product. The client sues the IT engineer for negligence and loss of income.

Example 2- The expertise of an architect has been hired to build a new building for a client. The architect stamps or signs off on plans that have an error in calculation.

What does a professional liability insurance cover? Even if you are not found liable, a claim can have a devastating impact on your business’ finances, your time and your reputation. This is where Professional Liability insurance becomes vital to safeguarding your business financially for the long run.

If your business is sued, Professional Liability insurance covers your legal expenses, including the required legal representation and damages to the victim if awarded. Even if you not found liable, your policy will cover the related legal costs to defend your lawsuit.

Professional Liability insurance will typically cover:

  • Attorney fees and other legal expenses
  • Associated settlement costs and expenses
  • Costs and expenses related to a judgment

 

Professional Liability insurance does not include cover for criminal prosecution and there may be liabilities under civil laws that may not be covered in a policy. To understand the exact inclusions and exclusions of your coverage refer to your policy’s wording.

 

Get instant quotes

 

 

Disclaimer: 

*As with any insurance, cover will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this web page is general only and should not be relied upon as advice. 

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!
Wayleen Ortiz
Wayleen Ortiz
04:36 15 Oct 21
Julia Georges-Louis
Julia Georges-Louis
22:28 29 Sep 21
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 1776
AmeriCreed 1776
15:42 23 Sep 21
MOVING FORWARD, I WILL BE SENDING ALL OF MY BUSINESS TO THIS COMPANY !!!! Incredible customer service!!! Thanks
THEODORE WELLS
THEODORE WELLS
19:49 09 Sep 21
Daniel Patrick Sullivan
Daniel Patrick Sullivan
16:49 07 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 Doe
Dissent Doe
22:21 02 Sep 21
Sheree Williams
Sheree Williams
19:39 27 Jul 21
Eugene was Awesome!!!!
Lakesha G
Lakesha G
17:19 21 Jul 21
Excellent solution for writers and authors professional liability policy as well as coverage for copyright and trademark infringement. Service was prompt and excellent.
Lane
Lane
18:22 22 Jun 21
Jugrid Ombisi
Jugrid Ombisi
16:26 15 Jun 21
Done in less than an hour!
William Opperman
William Opperman
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
Brenda Jones
Brenda Jones
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!
Arik Solberg
Arik Solberg
16:34 10 May 21
Adj Ako
Adj Ako
16:47 05 May 21
Very efficient they were able to help me out with my request promptly....highly recommend this companyI am very happy to have them
Elba Perez
Elba Perez
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 Martinez
Casper Martinez
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 Films
Poetic Films
21:00 07 Apr 21
Sandra Darjean-Murphy
Sandra Darjean-Murphy
17:48 31 Mar 21
Jusephine Ghong
Jusephine Ghong
17:58 23 Mar 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!!
Franklin Behm
Franklin Behm
19:04 16 Mar 21
Excellent service and prices.
Cassiopée V Lapierre
Cassiopée V Lapierre
23:13 09 Mar 21
S & S Professional care llc Home Health Agengy
S & S Professional care llc Home Health Agengy
04:15 24 Feb 21
Mr. Daniel Scott was very responsive to my professional needs.
Stephanie Woodruff
Stephanie Woodruff
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 Perez
Esined Perez
23:32 17 Feb 21
DIVINE FIJIANS HOME CARE SERVICES
DIVINE FIJIANS HOME CARE SERVICES
22:49 05 Jan 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 Wajdula
Joe Wajdula
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 Word
Lisa Word
21:51 24 Nov 20
Eugene was incredible. I called 4 other brokers before him who were impossible to get any help.
rhonda hale
rhonda hale
23:26 12 Nov 20
Owner (LPN)
Owner (LPN)
23:19 06 Nov 20
Cincere Browdy
Cincere Browdy
15:16 29 Oct 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 Sutton
Fran Sutton
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 Day
Aileen Day
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 Harris
Michele Harris
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 Rose
Christina Rose
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 Sloan
Nancy Sloan
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 jones
hope jones
20:31 25 Aug 20
If you need Private Home Care Provider insurance for your company, BizInsure, LLC can get it for you!
Pamela Curry
Pamela Curry
16:45 24 Aug 20
Cameron Peek
Cameron Peek
19:25 24 Jul 20
Great and fast service!!!! The representative was very professional!!!!
Tanya Sweet
Tanya Sweet
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.
Jimmy Smith
Jimmy Smith
19:01 14 Jul 20
Great service, but they're also extremely patient. I called over a month ago for specialized E & O coverage, and Bizinsure was able to put me in touch with an extremely reasonable quote. Absolutely invaluable time and monetary savings to be had by going through these folks. If you can-- ask for Anthony. Absolute gem of a human.
James Lang
James Lang
18:19 02 Jul 20
Ken M
Ken M
23:21 28 Jun 20
Great service insurance prices are great for professionals looking to get insurance for businesses....
Rhonda Gray
Rhonda Gray
22:34 22 Jun 20
The provided very professional service and made the process easy.
Paul Rising
Paul Rising
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 Smith
Kristene Smith
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 Hall
Fre Hall
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 Torres-Gale
Dawn Torres-Gale
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.
Nekeisha B.
01:30 05 May 20
Amazing
Jasmine Q
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. Atallah
Dr. Youssef C. Atallah
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 Mariscal
Josh Mariscal
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 Young
Allison Young
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 Wallace
Mark Wallace
23:42 13 Nov 17
Daniel Scott
Daniel Scott
15:15 27 Jun 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 Blair
Graham Blair
22:12 23 Jun 17
js_loader

Popular Searches