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Protecting your professional and legal liability for your customers

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$ 25/MO


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What Is Professional Liability Insurance?

Even if you’re an expert in your business, mistakes happen. And if your client or customer thinks a mistake in your professional services caused a financial loss, they can sue you. Professional liability insurance helps cover you and your company if you make a mistake in your professional services. This coverage is also known as errors and omissions insurance (E&O) or in some countries as professional indemnity insurance.

Professional liability insurance is coverage that protects business professionals such as attorneys, consultants, and accountants from claims of negligence or misconduct related to the services they provide. It’s often referred to as errors and omissions (E&O) insurance.

Experts in a specific field typically require professional liability coverage because their services can lead to mistakes that can cause financial or indirect loss for their clients. These types of incidents are typically excluded from other business insurance coverages.

What Does Professional Liability Insurance Cover?

Professional liability insurance helps cover claims of:

  • Negligence

  • Misrepresentation

  • Inaccurate advice

Even if you didn’t do anything wrong, your client can still sue your business if they believe you made a mistake. Without coverage, you’ll have to pay expensive legal defense costs out of pocket.

It’s important to remember that professional liability insurance doesn’t cover everything. For example, it won’t help your business with these kinds of claims:

  • Bodily injury or property damage: You’ll want to get a general liability insurance policy to help cover your costs if someone is injured on your business premises or you damage another's property.

  • Work-related injuries or illnesses: If your employees get hurt or sick from their job, you’ll need a workers’ compensation insurance policy to help them recover and return to work.

  • Data breach: You’ll need cyber insurance if your business loses confidential or sensitive information about your clients and customers.

Professional liability insurance coverage can help your business if:

  • Your accounting firm makes a clerical error that costs your client thousands of dollars.

  • A client sued your florist shop for errors in your services provided after you failed to deliver flowers on time for their wedding.

  • Your real estate firm recently sold a townhouse to a couple that was planning on starting a daycare. However, when the couple moved in, the townhouse association informed them that they couldn't use the property for a business. The new residents decided to file a lawsuit against you for negligence.

Professional liability insurance covers claims of actual or alleged negligence that arise from providing professional services, like giving incorrect advice, an omission, or failing to deliver a service. This coverage includes damages and defense costs up to your policy limits, regardless of whether a mistake was made.

For example, a client claims an accountant filed their taxes incorrectly and caused them to lose a lot of money. The accountant’s professional liability insurance could help cover the legal and settlement costs.

Many professional liability policies are written on a claims-made basis, which means that coverage is only afforded to claims filed during the policy period. A retroactive date may be added to cover incidents that occur before a policy’s coverage begins.

Professional liability insurance coverage can protect against claims that arise from services provided in the past and for work performed anywhere in the world.

It’s important to understand that professional liability won’t cover claims related to injury to others or damage to their property. General liability provides this type of protection. Learn the difference between general and professional liability coverage.




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How Professional Liability Insurance Works?

Many insurance companies write a professional liability insurance policy on a claims-made basis with a retroactive date and extended reporting period.

The retroactive date means you’re covered for incidents that happen on or after a specified date in your policy.

The extended reporting period helps cover claims filed within a certain time after your policy expires. This is generally a 30- to 60-day period, but you can extend this period to a year or more for an additional cost.

Your insurance company only covers claims made against your business during your policy period or within the extended reporting period. And the claim must be from a covered error or omission that happened after your policy’s retroactive date.

Who Needs Professional Liability Insurance?

Many types of businesses need professional liability insurance. Some states require this type of business insurance. In others, business owners choose to get coverage in case a client or customer sues them.

You’ll want to get a professional liability insurance policy if you:

  • Have to sign a contract that requires you to carry coverage

  • Offer professional services directly to customers

  • Regularly give advice to your clients

Any business that sells a professional service or gives advice should consider professional liability insurance to protect against lawsuits that arise from their mistakes.

Some states legally require that certain professionals, such as lawyers, have it before they can do business. Clients might also require that a business carry a certain amount of professional liability as part of their business contracts.

A variety of business professionals need professional liability insurance including:

  • Consultants

  • Attorneys

  • Engineers

  • Architects

  • Real estate agents

  • Insurance agents

  • Accountants

  • Home Inspectors

Which industries Need Professional Liability Insurance?

Meet Maya, an Architect. For Maya, the best part of being an architect is showing off the space she's created. Recently, a client's custom furniture didn't fit and now Maya is being sued. Luckily, Maya has a business owner's policy with professional liability insurance which helped pay for her legal fees.

Many small business owners don't realize the big benefits of adding this coverage to their business owner's policy.

  • Lawyers

  • Accountants

  • Consultants

  • Market Research Firms

  • Interior Designers

  • Advertising Agencies

  • Graphic Designers

  • Technology Professionals

  • Healthcare Professionals

How Does It Help?


A professional liability insurance policy helps with common claims like negligence, misrepresentation, and inaccurate advice. It will also help cover violations of good faith and fair dealing. If a client sues you, this policy may help pay your legal expenses.

How Much Does Professional Liability Insurance Cost?

Your professional liability insurance cost is unique to your business. Factors that can impact your errors and omissions insurance cost include:

  • Policy details, like coverage limits

  • Type of business

  • Location

  • Business size, number of employees, and clients

  • Years in business

  • Claims history

When you’re ready to get a quote, it’s a good idea to have important business documents on hand, such as:

  • Copies of contracts

  • Documentation procedures

  • Any information about previous errors and omissions coverage

  • Quality control processes

  • Employee training initiatives

Check Choco to get the right amount of coverage for your business at the right price. We’re here to help protect businesses in many industries with professional liability insurance.

The average cost for professional liability insurance is approximately $40 per month. While this number may help you understand the possible cost of this policy, it’s not customized to your unique situation.

Learn which attributes of your business impact the cost of professional liability insurance and discover ways to reduce your insurance prices.

How to get a professional liability insurance quote?

The quickest way to get professional liability insurance is to start an online quote.  You can have your professional liability insurance, along with other business insurance coverages in just a few minutes.

What is the difference between professional liability and general liability insurance?

Professional liability protects you from claims of neglect or professional errors, while General liability insurance protects against “third-party” damages for which you’re responsible. For example, somebody got injured inside your store - that’s should be covered under General Liability, while if your consulting company had an error that causes its customers to lose money, that will be covered under your Professional Liability Insurance. 

What is the difference between professional liability and general liability insurance?

Professionally, there’s no difference between errors and omissions insurance (E&O insurance) and professional liability insurance; the two terms are often used interchangeably.

Different industries and different locations may use different terms for the same type of coverage. You may also see professional liability insurance called errors and omissions (E&O) insurance, even though they’re identical except for the name.

The source of the difference is cultural. Professionals who have been working with England will often say “Professional Liability” while people from the United State will often refer to this policy as Errors and omissions.

Errors and omissions insurance is used most often for insurance agents, real estate agents, tax preparers, and IT professionals.

Lawyers and doctors refer to this policy as legal or medical malpractice insurance. (While Insureon doesn’t offer quotes for malpractice insurance, our licensed agents are happy to provide doctors and lawyers the other critical insurance they need.)

What type of insurance is professional liability insurance?

Professional liability insurance is a type of business insurance that provides coverage for professionals and businesses to protect against claims of negligence from clients or customers. Professional liability insurance typically covers negligence, copyright infringement, personal injury, and more. Claims covered by a professional liability policy can include damages caused by things you did and/or things that you should have done.

How does professional liability insurance work?

Although many types of businesses can be helped with professional liability insurance coverage, let's look at a few real-life examples. Let's say you're a project manager. You accidentally forget to get to tell your client about needed sign-offs causing project delays that increase the cost. Or maybe you're a massage therapist and your client sues you, claiming you caused tissue damage. These are just a few of the cases that professional liability insurance could help you with. Many people often pair it with general liability insurance for more complete coverage.

You should consider professional liability insurance if your business provides:

  • A professional service

  • Regular professional advice to clients

  • Contractual service to your clients

Getting the cheapest professional liability insurance

Every business' needs are different. A lot of things impact how much your premium will be. We're ready to work with you to get the coverage you need at a great price. See how much you could save on professional liability insurance through Choco today.

Several factors affect professional liability insurance costs, and you may be able to affect some of them: 

  • Industry and risk factors - your business activity dictates that

  • Coverage limits and deductible - this factor is mainly up to you, however, you don't want to become underinsured just to save some bucks.

  • Business size - that's based on your current size 

  • Day-to-day operations - you can adopt some strategies to become a safety-driven organization. in this case, you can save money

  • Claims history - If you have a "clean" record, the price usually be the lowest on this factor

The cheapest professional liability insurance will cost about $25 per month. In most cases, small businesses like yours will pay $58 on average per month for this policy.

Why do I need Professional Liability Insurance (PLI)?

Some jobs and contracts require PLI. Beyond that, mistakes happen. Make sure that you and your business are protected with the right coverage.

What does a professional liability insurance policy cover?

  • Mistakes Or Negligence

  • Services provided (or not provided) by your company that result in client damages.

  • Copyright Infringement

  • Copyright law issues, mistakes, oversights, and misunderstandings.

  • Personal Injury

  • Claims for libel or slander, whether they're true or not.

What else is covered under professional liability insurance?

  • Previously Performed Services. This is protection for current and previous work completed (for an agreed-upon timeframe). This timeframe is important to consider as things outside of this timeframe would not be covered.

  • Defense Costs. Legal defense costs associated with lawsuits against your company (regardless of fault).

  • Temporary Staff and

  • Independent Contractors

  • Work performed by your employees, including temporary staff and independent contractors.

What type of business can be covered by professional liability (or E&O) insurance?

Whether you own a small business, a growing one, a large company, or starting a new business, we could help you save on your professional liability insurance. Business examples include:

  • Beauticians/Salon Services

  • Career/Business Trainers & Coaches

  • Family/Mental Health Counselors

  • Management/Business Consultants

  • Occupational Therapists

  • Personal Trainers

  • Photographers

  • Real Estate/Property Managers

  • IT Consultants


And more...

Does your small business need professional liability insurance?

Professional liability insurance is designed for businesses that make a living off their expertise. Even the most experienced and thoroughly professional service provider makes mistakes. Unfortunately, clients may not be so understanding if your error costs them considerable time or revenue.

Professional liability insurance helps protect you from unsatisfied clients. For example, if you miss a project deadline, make an omission in your work, or provide ineffective business advice, your client may sue.

If you’re served with this type of lawsuit, your professional liability insurance policy will cover legal defense costs up to your policy limit.

Get your certificate of insurance today. Follow the customer journey of how to get free business insurance quotes online with Choco.

Does professional liability insurance cover losses related to the coronavirus (COVID-19)?

Professional liability insurance protects your business when a client sues over your work performance. That means it might provide coverage when a client sues over a project you were unable to finish or a deadline that you missed due to the coronavirus.

Keep in mind that many business insurance policies exclude communicable disease coverage. If you think you're eligible for a claim, contact your insurance company's claims department.

Professional liability insurance typically covers:

  • Work mistakes and oversights

  • Undelivered services

  • Missed deadlines

  • Claims of negligence

  • Breach of contract

While most of these terms are clear-cut, claims of negligence can be more complicated.

When a client hires you based on your specialized skills, they are entitled to a reasonable standard of care. If your work causes financial damage to a customer, you can be accused of professional negligence.

How do I get a certificate of insurance for a professional liability insurance policy?

Complete our easy online insurance application to get your insurance quote. Choco's artificial intelligent agent will help you choose the best professional liability coverage that meets the needs of your small business. You’ll typically be able to get coverage quickly and receive a copy of your professional liability insurance certificate as soon as you purchase the policy.

Want to learn how this policy could be bundled with your business insurance? Start a quote for your business insurance. 

How to get a business insurance certificate today?

Easily apply online with Choco, it only takes a few seconds, get covered and your certificate of insurance will be ready for you in your Choco insurance dashboard.

Do some clients require you to carry professional liability insurance coverage?

Yes, clients may request a certificate of insurance as proof that they have coverage. They want peace of mind that if you don’t meet their standards, they can recoup their losses.

Maintaining your professional liability coverage offers you the same assurance.

Many professional liability insurance policies are written on a “claims-made” basis with a retroactive date. This means that in order to collect your insurance benefits, your professional liability policy must be active:

  • When an alleged mistake occurs, and

  • When the claim is filed

With a claims-made professional liability policy, your coverage kicks in only when you file a claim during the policy period. Continuous coverage is key if you don't want to pay out of pocket for lawsuits.

How does professional liability insurance protect different professionals?

Accountants and auditors

Professional liability insurance for accountants and auditors covers the costs of lawsuits based on accounting errors, data entry errors, miscalculations, or lost documentation. Because the policy offers indirect financial protection for the client, some clients will require proof of insurance before they agree to work with your firm.


Professional liability insurance protects architects against accusations that a building design does not meet project specifications, was delivered late or contained errors. A client contract might include a clause that requires professional liability insurance coverage.


Professional liability insurance for consultants offers financial compensation for lawsuits alleging ineffective advice or inaccurate projections. Some clients may ask you to provide proof of professional liability insurance before they agree to work with you.


Professional liability insurance for engineers covers financial protection from lawsuits over disputes such as cost overrun, delivery delays, and problems with construction materials. You may need to provide proof of professional liability insurance to a client, partner, or licensing board for some projects.

How does professional liability insurance differ from general liability insurance?

General liability and professional liability insurance 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 insurance covers any legal defense costs when a client or customer suffers a financial loss due to your professional services or advice.

Get business insurance coverage today

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