Protect yourself from claims that your professional services caused financial harm. Essential coverage for consultants, tech companies, and anyone who provides advice or services for a fee.
Professional liability is a "claims-made" policy, meaning it covers claims made during the policy period, regardless of when the incident occurred (subject to your retroactive date).
When a client alleges your professional work caused them financial harm—through an error, omission, or failure to perform—you notify your insurer immediately, even before a formal lawsuit.
Your insurance company provides legal defense from day one. This is crucial because E&O claims often require specialized attorneys who understand professional standards in your industry.
The insurer investigates the claim, negotiates with the claimant, and either settles or defends through trial. All costs—defense attorneys, expert witnesses, settlements—come from your policy.
If you change insurers or stop coverage, you may need "tail coverage" (extended reporting period) to protect against claims arising from past work. This is important to understand before switching policies.
Washington State requires professional liability insurance for certain licensed professions. Architects and engineers must carry E&O coverage to maintain their state licenses.
Real estate agents in Washington are strongly encouraged to carry E&O insurance, and most brokerages require it as a condition of affiliation. The Washington REALTORS® association recommends minimum $1 million coverage.
Healthcare providers including therapists, counselors, and nurses need malpractice coverage which is a form of professional liability specific to medical services.
Insurance agents in Washington must disclose whether they carry E&O coverage. While not legally required, operating without it is considered unprofessional and risky.
Many Washington State and local government contracts require consultants and professional service providers to carry specified minimum E&O coverage, typically $1-2 million.
Your profession—each field has different claim patterns and risk profiles that insurers evaluate when assessing coverage
Annual revenue and billable hours—these indicate the scope of your practice and potential exposure
Coverage limits—standard limits may work for some, while larger contracts may require higher protection
Deductible selection—the amount you're willing to pay out-of-pocket before coverage kicks in affects your rate
Claims history—your professional track record is one of the most significant factors insurers consider
Retroactive date—how far back your coverage extends for prior work affects your policy
Client types—the size and nature of your clients can influence the coverage requirements you need
Get a personalized quote to see exactly what professional liability costs for your business.
Get Your QuoteSee how professional liability protects Washington businesses in actual claim scenarios.
An IT consultant in Seattle delivers a custom software project that contains critical bugs. The client's business operations are disrupted for two weeks, costing them $200,000 in lost revenue and emergency fixes.
Professional liability covers the legal defense and settlement. Without E&O, the consultant would face personal liability for the full claim—potentially bankrupting their business.
A bookkeeper makes a tax filing error that results in $45,000 in IRS penalties and interest for their client. The client sues to recover these costs plus their legal fees.
E&O insurance covers the defense costs and settlement. The bookkeeper pays only their deductible while the insurer handles the rest up to policy limits.
A real estate agent fails to disclose known foundation issues on a property. The buyer discovers the problem after closing and faces $80,000 in repairs. They sue the agent for negligence.
Professional liability covers this failure to disclose claim. The policy pays for legal defense and any settlement, protecting the agent's personal assets and career.
They're essentially the same type of coverage with different names used in different industries. "Malpractice" is typically used for healthcare and legal professionals, while "E&O" (Errors & Omissions) or "Professional Liability" is used for other professional services like consulting, accounting, real estate, and technology. Both protect against claims that your professional work caused financial harm to a client.
Most professionals need at least $1 million per claim and $1-2 million aggregate annually. The right amount depends on your contract requirements, the size and value of projects you handle, and your industry standards. Technology consultants and architects working with larger clients often need $2-5 million. Review your client contracts—many specify minimum coverage requirements that you must meet.
E&O covers claims that you failed to perform your contracted services properly—errors in your deliverables, omissions in your work, or negligence in how you performed. It generally does not cover disputes about payment, scope changes, or general business disagreements unrelated to professional negligence. If a client claims your work product was deficient and caused them financial harm, that's covered.
Yes, if you provide professional services or advice. These policies cover completely different risks with no overlap. General liability covers physical incidents—bodily injury to others and property damage. Professional liability covers financial harm from your professional work. A consultant needs GL if a client trips in their office, and E&O if their advice doesn't work out. Most professional service businesses need both policies.
Claims typically arise when a client believes your work product was deficient, your advice was wrong or incomplete, you missed a deadline that cost them money, you made errors in calculations or analysis, or you failed to deliver what was promised. Even if you did everything right, you may still face claims—which is why coverage for legal defense is so valuable. Defending against a frivolous lawsuit can cost $50,000+ in legal fees alone.
Professional liability policies are "claims-made," meaning they cover claims made during the policy period, not when the alleged error occurred. This differs from "occurrence" policies like general liability. The implication: if you cancel your E&O policy, you're not covered for claims that arise later from past work. You may need "tail coverage" (extended reporting period) when retiring or changing insurers to maintain protection for prior work.
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