Professional Liability Insurance
Errors and omissions coverage for advice, service, and expertise
When a client says your work cost them money, this is the policy that pays the lawyers — whether or not they're right.
Professional liability — also called errors and omissions, or E&O — responds when a client alleges that your professional service caused them financial harm. That includes mistakes you actually made, work you never got around to, advice that turned out badly, and missed deadlines. It also responds to allegations that are simply wrong, which is the point: defending a groundless claim from a frustrated client can cost tens of thousands of dollars before anyone reaches a conclusion.
General liability handles physical harm. Professional liability handles economic harm, and for consultants, agencies, engineers, accountants, IT firms, and healthcare practices that is where the real exposure lives. Nobody trips over your spreadsheet, but a bad number in it can cost a client six figures. The claims that arrive are rarely dramatic — a delayed launch, a design that failed inspection, a filing that missed a deadline, an integration that dropped data.
Most professional liability is written on a claims-made basis, which means the policy in force when the claim is reported is the one that responds — not the policy in force when you did the work. That makes your retroactive date one of the most important numbers on the policy, and it is why switching carriers carelessly can quietly erase years of protection. We track it for you.
What's covered
- Negligent acts and errors. Mistakes in the professional services you delivered, including calculation, specification, and advisory errors.
- Omissions and missed deadlines. Work you failed to perform or filings and milestones you missed.
- Legal defense costs. Attorney fees, expert reviews, and settlement negotiation, even when the allegation is meritless.
- Breach of professional duty. Claims that you failed to meet the accepted standard of care in your field or your contract.
- Subcontracted work. Services performed on your behalf by contractors, where the policy is endorsed to include them.
- Regulatory defense. Coverage for licensing board or regulatory proceedings tied to your professional services, where available.
What it doesn't cover
- Bodily injury and property damage. Those belong under general liability, not E&O.
- Intentional or fraudulent acts. Deliberate wrongdoing and dishonesty are excluded across the market.
- Unpaid invoices. The policy does not collect fees a client refuses to pay, though it may defend a counterclaim.
- Guaranteed outcomes. Promising a specific financial result in a contract can void coverage for that promise.
- Prior known claims. Anything you were aware of before the retroactive date or policy inception is excluded.
How claims actually play out
The migration that lost the data
An IT consultancy migrated a distributor's order system over a weekend. Ninety days of pricing history did not come across, and the client billed dozens of orders at the wrong rate before anyone noticed.
Outcome: The client demanded $210,000. The policy funded defense and a negotiated $96,000 settlement; the consultancy stayed in business and kept two other accounts with the same customer.
The permit that failed review
A structural engineer's load calculations were rejected during plan review, delaying a mixed-use project by eleven weeks while the design was reworked.
Outcome: The developer sued for carrying costs. E&O covered $64,000 in defense and a $130,000 settlement, and the engineer's firm avoided a judgment on its record.
The campaign nobody approved
An agency launched a rebrand using stock photography licensed for internal use only. The photographer's representative sent a demand letter three weeks later.
Outcome: The policy paid a $38,000 licensing settlement and $12,000 in legal fees, and the agency rewrote its asset-clearance process.
What drives your price
- Services you provide
- Advising on financial or safety-critical decisions is rated far higher than routine administrative services.
- Annual revenue
- Revenue is the primary proxy for how many engagements you run and how large your clients are.
- Client concentration
- If one client is 40% of revenue, one dispute can be existential — carriers price that concentration in.
- Limit and deductible
- $1M/$1M is common for small firms; larger contracts often require $2M or more, and a higher deductible lowers premium.
- Retroactive date and claims history
- Years of continuous prior coverage and a clean record are the strongest pricing levers you control.
Professional Liability questions
Ready to price professional liability?
One application, shopped to up to 10 A-rated carriers. A licensed agent presents the options side by side — usually within one business day.