Understanding Professional Liability Insurance

Professional liability insurance, also called Errors and Omissions (E&O) insurance, protects service-based businesses from claims of negligence, mistakes, or failure to deliver promised results. Unlike general liability which covers physical injuries and property damage, professional liability covers financial harm caused by your professional services or advice.

Who Needs Professional Liability?

Any business that provides services, advice, or expertise should consider professional liability coverage. This includes:

• Consultants
• Accountants and CPAs
• Architects and engineers
• IT professionals
• Marketing agencies
• Real estate agents
• Insurance agents
• And many other service providers

If a client claims your work caused them financial loss, professional liability insurance covers your legal defense and any settlements—even if the claim is unfounded.

Real-World Claims

Real-world claims happen more often than you'd think. A consultant's recommendation leads to a failed project. An accountant makes an error on a tax return. A web developer's site crashes during a client's busiest sales period. A marketing campaign underperforms expectations. In each case, the client might sue for damages. Professional liability insurance protects your business and personal assets from these claims.

Coverage and Costs

Coverage typically ranges from $250,000 to $2 million or more, depending on your profession and contract requirements. Many client contracts specify minimum professional liability limits before you can start work. The cost is reasonable—often $50 to $150 per month for most professionals—and provides essential protection that general liability doesn't offer.

Get Tailored Coverage

SmartInsured offers professional liability coverage tailored to your specific profession. Our AI-powered system identifies your unique risk factors and recommends appropriate coverage limits. Protect your reputation and your finances with E&O insurance. Get a quote in minutes.