When your clients claim your advice or work caused them financial harm, Professional Liability covers the cost of your defense — and any damages awarded — regardless of whether the claim has merit.
Also called Errors & Omissions (E&O) insurance, Professional Liability protects companies from lawsuits when clients allege that errors, mistakes, or a failure to meet contractual promises caused them financial harm. The policy covers both litigation costs — including attorney fees and court expenses — and any court-awarded damages, up to your policy limits.
This coverage applies even when a claim is meritless. Defending against a frivolous lawsuit is expensive regardless of the outcome, and Professional Liability ensures you can mount a proper defense without draining your operating capital.
If a client claims your advice or work caused them financial harm — even without proof — Professional Liability covers the cost of your defense. General Liability alone is not enough for professionals.
General Liability covers bodily injury and property damage to third parties — physical harm. It does not cover claims that your professional service, advice, or finished work was defective, incomplete, or failed to meet the client's expectations. That gap is exactly what Professional Liability fills.
Additionally, while General Liability is written on an occurrence basis, Professional Liability is written on a claims-made basis — meaning the policy that is active when the claim is filed is what responds, not necessarily the policy that was active when the work was performed. This distinction matters when changing carriers.
Standard limits are $300,000, $500,000, and $1 Million per occurrence. Higher limits are available and often required for enterprise contracts, government work, or large-scale professional engagements.
Any business whose primary service is professional judgment, expertise, or specialized knowledge should carry E&O coverage. This includes:
Design and specification errors can result in costly construction defect claims.
Technology failures, data loss, and project delivery disputes are common sources of E&O claims.
Tax errors, missed filings, or investment advice that results in financial loss can trigger professional liability claims.
Medical malpractice and allied health E&O are critical for practitioners in clinical or advisory roles.
Creative and strategic professionals can face claims when deliverables fall short of contractual expectations.