What is professional liability insurance?
Professional liability, often called errors and omissions insurance, addresses financial harm alleged to result from professional advice or services.
Forms are tailored to the profession and are often claims-made, so definitions, retroactive dates, and reporting provisions are central.
What it commonly protects
The exact response depends on the policy form, endorsements, limits, and facts of a claim.
Errors and omissions
Covered mistakes or failures in defined professional services.
Negligence allegations
Defense and covered damages when a client alleges professional negligence.
Undelivered services
Certain claims that contracted services did not meet agreed standards.
Defense costs
Legal defense subject to the policy’s limits and terms.
Common limitations and gaps
- Bodily injury and property damage are often handled elsewhere.
- Known circumstances and prior acts may be excluded.
- Cyber, media, fiduciary, and management liability may require separate forms.
- Late notice can jeopardize claims-made coverage.
What affects coverage needs
- Professional services, credentials, and client types
- Contracts, project size, and revenue
- Prior acts, claims, and known circumstances
- Use of subcontractors and quality-control practices
What to compare between policies
- Definition of professional services
- Claims-made trigger, retroactive date, and reporting window
- Defense inside or outside limits
- Exclusions, consent-to-settle terms, and sublimits
A practical next step
Gather current policies, a clear description of operations, property and equipment values, vehicle and employee information, major contracts, and recent loss history. Those details make it easier to compare coverage as well as price.
Coverage availability, terms, limits, and eligibility vary by insurer and state. Coverage can be confirmed only by the issued policy and applicable endorsements.