Professional Liability Insurance
What is Professional Liability Insurance?
Professional Liability Insurance (PLI), also known as Errors & Omissions (E&O) Insurance, provides coverage for claims of negligence, errors, or failure to perform professional services. Unlike General Liability Insurance, which primarily covers physical injuries and property damage, PLI focuses on financial losses stemming from mistakes or alleged mistakes made during the provision of professional services.
This type of insurance is particularly important for service-based businesses such as consultants, lawyers, accountants, and IT professionals, where the nature of the work involves giving advice, making recommendations, or delivering technical services that could potentially lead to financial harm for clients if something goes wrong.
Why is Professional Liability Insurance Important?
- Coverage for Claims of Negligence: PLI protects your business from legal claims alleging that errors, omissions, or negligence in the professional services you provided caused financial harm.
- Protection Against Lawsuits: Even if you did nothing wrong, defending against a lawsuit can be costly. PLI covers defense costs, which can help protect your financial assets.
- Requirement for Contracts: Many clients require proof of Professional Liability Insurance before entering into a contract. This ensures that you can meet contractual requirements and secure new business opportunities.
It is important to note that PLI does not cover physical injuries or property damage, which are typically covered under General Liability Insurance. To ensure complete protection for your business, consider combining PLI with a Business Owners Policy (BOP), which bundles general liability, property coverage, and more into one convenient package.
Professional Liability vs. Other Commercial Policies
| Insurance Type |
Description |
Link |
| Professional Liability Insurance |
Provides coverage for claims related to negligence, errors, or omissions made during the course of professional services. |
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| General Liability Insurance |
Covers claims of bodily injury or property damage caused by your business operations. |
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| Business Owners Policy (BOP) |
Combines General Liability, Commercial Property, and Business Interruption coverage in one policy for small businesses. |
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| Commercial Property Insurance |
Covers damage to the physical assets of your business, such as buildings and equipment. |
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| Employment Practices Liability Insurance (EPLI) |
Protects your business from claims related to employment practices, such as wrongful termination or discrimination. |
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| Workers' Compensation Insurance |
Provides benefits to employees who suffer work-related injuries or illnesses. |
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Who Needs Professional Liability Insurance?
Professional Liability Insurance is essential for any business that provides services or advice to clients. This includes, but is not limited to:
- Consultants and Advisors: Whether you're providing business consulting, IT advice, or financial guidance, PLI helps protect you from claims that your recommendations led to financial harm.
- Medical Professionals: Health practitioners may also require Medical Malpractice Insurance in addition to PLI to cover claims arising from medical negligence.
- Contractors: Those in specialized trades may also need Contractor General Liability Insurance along with PLI to ensure full protection against both physical damages and professional errors.
Combining PLI with other coverages like Commercial Auto Insurance or Commercial Property Insurance can provide well-rounded protection tailored to the unique needs of your business.
Get a Quote: What Information is Needed?
Our agents would love to help you secure the right Professional Liability Insurance for your business. For a customized quote, please provide:
- Business Details: Name, address, and type of professional services you provide.
- Revenue Information: The annual revenue of your business, which helps us determine the appropriate coverage limits.
- Past Claims History: Any history of previous claims related to professional liability, if applicable.
Request Professional Liability Quote
Frequently Asked Questions
- What does Professional Liability Insurance cover? It covers claims related to negligence, errors, or omissions made while providing professional services. It does not cover bodily injury or property damage—that would fall under General Liability Insurance.
- Who requires Professional Liability Insurance? It is often required by clients as a condition for doing business, especially in industries where errors or negligence can cause significant financial harm.
- How much does Professional Liability Insurance cost? The cost varies based on factors such as the type of services provided, the size of your business, and your claims history. Contact us for a personalized quote.
- Is Professional Liability the same as General Liability? No, General Liability Insurance covers bodily injury and property damage, while Professional Liability Insurance covers claims related to errors or negligence in professional services.
