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What Is Professional Liability Insurance?
Even if you’re an expert in your business, you may make a mistake. And if the client or customer thinks the mistake impacted them financially, you may be sued. Professional liability insurance, also known as errors and omissions insurance, or professional indemnity insurance in some countries, helps cover you and your company if you are found negligent in the professional services you provided.
Is Your Business Protected? Mistakes Can Be Costly
Legal Fee Coverage
If your small business gets sued for an error made working for a client, are you prepared to pay attorney fees?
With Professional Liability Coverage your lawyer fees are covered up to a certain limit amount.
Paying Tax Penalties
If you are an accountant or bookkeeper and make a clerical error that costs a client thousands of dollars, you could be held responsible for the client’s tax penalty.
The tax penalty and any litigation would be covered up to a certain limit amount.
Miss the Key Moment?
Say you’re a photographer and you miss the photo of the first kiss at a wedding. The bride sues, you pay out of pocket for services not delivered.
Professional Liability Insurance covers you for services not delivered.
Information and Data Loss Protection
You’re a consultant installing software to a company’s computer system. The installed software causes client information to be exposed externally. You could be liable for the exposure of your client’s personal information.
You will be covered for the loss of client information.
Who Needs Professional Liability Insurance?
Many types of businesses need professional liability insurance. In some states certain kinds of professional practices are required to carry professional liability insurance. In other cases, a client may require a business to have professional liability insurance as a condition of a contract to do work.
Some professionals that should consider getting coverage include:
- Attorneys and law firms
- Real estate agencies
- Architects
- Accountants and financial institutions, such as accounting houses and brokerage firms
- Engineers and engineering firms
- Advertising and media firms
- Teachers and educators in private practice
- Educational businesses, like schools and colleges
- Marketing firms
- Cultural organizations, including museums and galleries
- Medical offices and healthcare facilities
- Barbershops and hair salons
- Printing and publishing companies
- Veterinary offices and pet groomers
What’s Included in Professional Liability Insurance?
- Errors & Omissions: Also known as Professional Liability insurance, helps cover you if you are found negligent in the professional services you provided.
- Financial Harm: Helps protect you against a claim alleging that professional advice or services you provided caused a client or customer financial harm due to mistakes on your business’s part.
- Personal Injury: Helps provide coverage for allegations of personal injury arising out of a professional service.
- Subpoena Assistance: Helps provide legal defense if the insured is not named as a defendant but is subpoenaed in a lawsuit requiring the insured to testify or provide documents.
- Disciplinary Proceedings: Helps cover your defense in a claim brought by a regulatory board within your line of profession alleging professional misconduct.
- Additional Defense Limits: Instead of having one set of limits that applies to both your indemnity and defense payments, this endorsement allows you to have limits for defense that are separate from your limits for indemnity.
** Costs, premiums, and coverages mentioned are estimates and are not guaranteed. Actual cost, premium, and coverage are determined at the time of quote or issue and are specific to an individual risk. Premiums are based on information provided to The Hartford, including, but not limited to, underwriting and rating criteria. All examples included on this website or in an advertisement are intended for informational purposes only and are not an offer or a guarantee of premium or coverage. Coverage and products described are subject to the terms and conditions found in the policy contract. Any educational information provided about available coverages does not modify the policy language or imply that any claim is covered. Products are not available in all states or for all businesses.
Availability of different coverage limit options may vary by class of business. Product limits of liability are dependent upon state approvals.
Professional liability may only be available as an endorsement for some classes.
Additional disclosures below.