Professional Liability Insurance

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Business professional liability insurance can help protect your business if you are accused making a professional mistake or negligence.

A client or customer can file a lawsuit against you if they think you did something to cause a financial loss. If you have a professional liability insurance policy, you could get financial help to defend your business or fix the mistake.

Professional liability is common coverage for professional services, such as accountants, consultants and real estate professionals.

However, many different types of businesses also buy this type of business insurance.

It is sometimes known as errors and omissions insurance or professional indemnity insurance.

Professional liability can help you resolve the issue quickly, avoiding customer confrontations and protecting your reputation if a customer claims you made a mistake — whether you did or not.

Your coverage can help you pay for expenses if you’re at fault for a mistake or professional negligence. It can also help pay for defense costs if you're falsely accused.

Most business owners need professional liability coverage because it can provide protection from unexpected expenses if they are accused of a professional mistake.

Professional liability insurance is different for each profession and each claim is unique. Here are some examples of how it can help protect different types of businesses: 

Your client sues you for making a mistake that led to them losing out on significant tax advantages and paying more than they had to. Professional liability could help cover some of your defense costs.

A client alleges that a mistake you made in your designs led to the collapse of a stairwell and sues you for causing injuries. Your insurance could help cover the cost of damages if your business is at fault.

You show a furnished property to prospective buyers during an open house. One of them accidentally damages a wall. The property owner asks you to cover the repairs. Professional liability could provide financial help.

There are two core areas where professional liability can help protect a small business from unexpected costs:

You can follow all the rules, do everything right and still make a mistake — it happens to almost everyone.

Professional liability insurance can help protect you from paying entirely out-of-pocket if you or your employees are accused of making a mistake that causes financial harm to another person or business.

Example: You're a property manager and the property owner claims you made repeated mistakes on the paperwork for transactions between tenants that cost $50,000.

The property owner sues you to get reimbursed. Your professional liability coverage could cover some expenses up to the policy limit.

There are standards of service for every profession. Business owners are generally expected to act in the best interest of their clients. 

You might find yourself accused of professional negligence and forced to defend yourself if your business actions caused a financial loss for a client.

Example: You did nothing wrong, but a very angry client still wants to take you to court because they claimed you were negligent and did a terrible job. The legal battle draws out and your lawyers charge you $500,000 to fight a lawsuit that you ended up winning.

Your professional liability policy could cover some expenses up to the limits of your policy, including your lawyer and legal fees.