Professional Liability Insurance

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What Is Professional Liability Insurance Coverage?

Professional liability insurance, or errors and omissions insurance (E&O) insurance, is essential for businesses providing services. Even with experience, mistakes happen, and clients may sue if they believe those errors caused financial loss or damage.

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The Importance of Professional Liability Insurance

Professional liability insurance protects businesses from financial losses due to claims of actual or perceived mistakes. For small business owners, this coverage is essential, offering vital protection in challenging situations. It’s especially important for those who:

Provide expert services

Advise clients

Are contractually obligated to maintain Professional Liability coverage

What Does Professional Liability Insurance Cover?

At Risk Specialty Group, our professional liability insurance is designed to protect small businesses against claims of:

Negligence

Coverage for claims that your professional services caused damage or injury to a client. For example, if your accounting firm makes an error that results in financial losses for a client, you could be held liable.

Misrepresentation

If a client claims that false or misleading information led them into an agreement that caused them harm. For instance, your real estate firm sells a property to a client, only for them to find out later that the property cannot be used for the intended purpose, leading to a lawsuit.

Inaccurate Advice

Protection if a client claims that your advice caused them harm. For example, if your business fails to deliver a service as promised, and the client suffers a loss, they may take legal action.

Personal Injury

If you’re accused of libel or slander, even if the claims are unfounded. For instance, if a competitor alleges that your advertising damaged their reputation, you could face a lawsuit.

Copyright Infringement

Protection against claims that you used copyrighted material without permission. For example, if your business uses a sound or image in marketing without proper authorization, the copyright owner may sue.

Defence Costs

Professional liability insurance helps cover legal defence costs, such as attorney fees and court expenses if you’re sued for mistakes in the services you provide.

Even if you believe you’ve done nothing wrong, clients can still file lawsuits. With Risk Specialty Group’s professional liability insurance, you won’t have to shoulder the burden of costly legal defence out of pocket.

Who Needs Professional Liability Insurance?

Professional liability insurance is essential for any business that provides services or advice to clients. This coverage is particularly important if you:

Are required to have coverage by contract
Provide professional services directly to customers
Frequently offer advice or guidance to clients

In some US states, this business insurance may even be legally mandated for certain professions. It’s critical to understand if your business falls under these requirements.

We specialize in providing professional liability insurance for a number of industries, including but not limited to:

Architect

Engineers

Finance

Land Surveyor

Legal

Environmental Consultants

IT Firms

Interior Designers

Oil & Gas Consultants

Manufacturers

EPC Firms

Acquiring Coverage

At Risk Specialty Group, we streamline the process of obtaining professional liability quotes, ensuring convenience and accessibility for business owners seeking this protection.

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How Does Professional Liability Insurance Function?

Professional liability insurance is typically offered on a claims-made basis, which includes a retroactive date and an extended reporting period.

Retroactive Date

This date specifies that coverage applies to incidents that occur on or after the date outlined in your policy.

Extended Reporting Period

This provision allows you to file claims for a certain period after the policy has ended. This period usually ranges from 30 to 60 days, but you can extend it for a longer period, such as a year or more, by paying an additional premium.

Your policy covers claims made within the policy and extended reporting periods, but the claim must relate to an event that occurred after the retroactive date. Professional liability insurance can help protect your business from:

Damages
Legal defense fees
Disciplinary actions
Lost income due to litigation
Assistance with subpoenas

Occurrence Policy

Some policies operate on an occurrence basis, meaning they provide coverage for incidents that occur during the policy period, regardless of when the claim is filed, even if it is after the policy expires.

Professional Liability Insurance FAQS

What's the Difference Between Professional Liability Insurance and General Liability Insurance?

Professional liability insurance covers claims related to errors, omissions, or negligence in the services or advice you provide. In contrast, general liability insurance protects against physical injuries or property damage that occur during the course of your business operations.

Will Professional Liability Insurance Cover Me if a Lawsuit Is Unfounded?

Yes, even if a lawsuit is baseless, professional liability insurance will help cover your legal defence costs, ensuring that you’re protected from frivolous claims.

Does Professional Liability Insurance Provide Coverage if I Am at Fault?

Yes, suppose you’re found at fault for a mistake or oversight in your professional services. In that case, your professional liability insurance can help cover the damages and legal fees associated with the claim.

Is Errors & Omissions Insurance the Same as Professional Liability Insurance?

Yes, errors & omissions (E&O) insurance is another term for professional liability insurance. Both provide protection against claims arising from mistakes or negligence in the services you offer.

What Information Is Needed to Get a Professional Liability Insurance Quote?

To get a quote, you’ll typically need information about your business, including the type of services you provide, your business size, location, claims history, and any specific coverage requirements.

Is Professional Liability Insurance Worth It?

Yes, professional liability insurance is highly valuable for businesses offering services or advice, protecting you from costly lawsuits that could arise from errors, omissions, or professional negligence.

What Is a Professional Liability Insurance Certificate?

A professional liability insurance certificate is a document that proves you have coverage. It includes key details such as the coverage period, policy limits, and named insureds.

What Doesn't Professional Liability Insurance Cover?

Professional liability insurance doesn’t cover claims related to physical injuries, property damage, intentional wrongdoing, or fraudulent activities. For these types of risks, additional policies may be required.

What Is an (Additional Insured) on a Professional Liability Policy?

An additional insured is an individual or entity that is added to your policy, granting them coverage under your professional liability insurance for claims that may arise from your business operations.

Get more answers to your professional liability insurance questions by contacting Risk Specialty Group today.

Contact Us Today

Ready to take the next step? Contact Insurance Firm today and experience the trusted support of Risk Specialty. Whether you need expert guidance or have questions about your professional liability insurance, we’re just a call or click away. Let’s connect and secure your professional future today!

Professional Liability Insurance Blog

Stay informed with industry insights and expert analysis on professional liability insurance. Visit our risk management blog for valuable resources and updates from Risk Specialty.

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David Nelson

15:10 01 Apr 19

Risk Specialty Group has handled my micro-company's insurance for almost three years. They have consistently provided prompt, professional, friendly, and effective customer service. I am always sure that I have access to their "A" team and that they are in my corner. Of all my service providers, they are #1 in that department. 6 stars if I could.

Todd McMakin

16:00 04 Dec 18

We have been using the Risk Specialty Group for our company insurance for two years and have been very happy with our rates and with the customer service that we have received. They are always quick to respond to questions and requests. Highly recommended!

Su Young

18:52 04 Dec 18

Risk Specialty's owner is great to work with, excellent knowledge of the marketplace and clients' insurance needs. The staff is thorough, experienced and friendly. Great shop to consider for your insurance needs.

Elizabeth Schlitzberger

15:23 17 Jan 19

Very professional group with great attention to detail. They care about their customers! I highly recommend them!

Parallax Consulting Group

01:30 19 Dec 18

I am currently renewing my coverage for year (2) of my business. Everyone at RSG has been extremely helpful, while also being clear and concise with all my options and/or questions through every step of my growth, risk management and company success. I would highly advise and/or recommend RSG to anyone looking to find a firm you can count on...but most importantly, trust!