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What is Professional Liability Insurance?

Often referred to as Errors and Omissions (E&O), professional liability insurance helps cover you and your business if you make a mistake in the services provided to a customer.  Even if you did not make a mistake but your customer believes you did and sues you, this coverage will help pay for your defense.

Who Needs It?

Many businesses may benefit from professional liability insurance, especially if you are routinely providing advice to your customers or clients. If you require specialized training to provide your service then chances are this coverage will be a good fit for your business. A few common examples are:

  • Lawyers
  • Accountants
  • Architects & Engineers
  • Financial Services
  • Consultants
  • Real Estate Agent
  • Health Care
  • Tech contractors \ consultants
  • Independent contractors
  • Education
  • Project Management
  • Developers (Web\App\Full Stack)

Example – A contractor makes a design change while building a house for a client, and that change (say moving a support beam) caused structural damage down the road – the contractor may be responsible for the damage.

What's Covered?


Whether alleged or actual – professional liability can protect you and your business from claims that can include anything from giving incorrect advice or omitting information to failing to deliver your service within a desired timeframe. A professional liability may help cover your expenses and relevant damages that result.

Defense Costs

An often overlooked yet key benefit to an E&O policy is defenseAnyone can sue anyone else for any reason at anytime, regardless of whether it’s a valid accusation or not. If the alleged behavior is covered under the policy then the insurance company will provide the experts and legal defense on your behalf.

Personal Injury

Libel and slander are types of defamatory statements. If you or your employees are sued for libel (written) or slander (spoken), valid or not, a professional liability policy can protect your business.


Your business can be sued for alleged wrong or errors committed by temporary employees and independent contractors working on your business’s behalf.

Keep in Mind

Professional Liability is not a replacement for General Liability, nor does it cover intentional acts such as fraud. Professional Liability should be combined with your other business policies to provide wholistic protection based on your business’s needs. No two businesses are the same, and there are many options available to tailor coverage to your needs – speak with a qualified professional to understand your options.


It’s worth noting that Professional Liability typically works on a claims made basis –  This can be a little different from other policies you may be familiar with.

Normally, in claims made policies, claims need to have occurred and been reported within the policy period (typically a 1 year timeframe).  However, you do have the option to extend the coverage window by defining a Retroactive Date and Extended Reporting period, details on each below

Professional Liability
  • Policy Period – As with other policies, the term is typically a one year period starting when you purchase the policy.
  • Retroactive Date – Allows you to select a date prior to the policy’s effective date for when services were provided and can be covered.
  • Extended Reporting Period – Allows you to extend the timeframe for when claims may be reported and covered beyond the policy’s expiration date.