What does professional liability cover?
If your client or customer believes you’ve done something wrong or committed an error, they can sue. Even if you’re completely innocent. Without coverage, you’ll have to pay legal defense costs and possible claims settlements out of pocket.
If you’re involved in a claim or lawsuit for work mistakes or errors, failed services, negligence in professional services, or damages resulting from missed deadlines, E&O insurance can cover:
How does professional liablity insurance work?
Many insurance companies write a professional liability insurance policy on a claims-made basis with a retroactive date and extended reporting period.
Your insurance company only covers claims against your business during your policy period within the extended reporting period. The claim must be from a covered error or omission that happened after your policy’s retroactive date.
Some policies can also be written on an occurrence policy. This means there will be coverage for losses that happen during your policy period, even if the claim gets reported after your policy expires.
How much does professional liability insurance cost?
What if I already have general liability insurance?
General liability and professional liability both protect against common small business liability claims, but they cover different types of lawsuits.
General liability insurance covers customer bodily injuries, customer property damage, and advertising injuries. In contrast, professional liability policies cover any legal defense costs when a client or customer suffers a financial loss due to your professional services or advice.
Professional liability FAQs
Yes. In fact, there is no difference between errors and omissions and professional liability insurance; the two terms are often used interchangeably. If you are shopping for professional liability insurance, you are correct if you refer to it as Errors & Ommissions insurance.
Yes. This does happen from time to time. You may have done nothing wrong when providing your professional services, however, your client believes you were at fault and cause them damages. They may make a claim or even sue you. If you have professional liability insurance it covers your legal expenses when the claims do or don’t have merit.
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