What this coverage is
Professional liability insurance, often called errors and omissions (E&O), helps respond when a client alleges that your professional services, advice, or work were negligent, contained errors, or failed to deliver as promised, resulting in financial loss.
Unlike general liability, which focuses on physical injury and property damage, professional liability addresses the economic harm that can flow from professional mistakes. These policies are commonly written on a claims-made basis, so timing and continuous coverage matter.
Who commonly needs it
Businesses and individuals who provide expertise, advice, or specialized services for a fee commonly carry professional liability. Many client contracts specifically require it.
Where this coverage commonly fits
Contract-driven — coverage that is often required by contracts, clients, landlords, or lenders. Professional liability commonly fits service and advice businesses, and client contracts frequently require it.
- Consultants and agencies
- Technology and software providers
- Accountants, financial professionals, and advisors
- Healthcare and allied-health providers
- Architects, engineers, and design firms
What it may cover
- Claims of professional negligence, errors, or omissions
- Failure to deliver promised professional services
- Defense costs for covered claims, subject to policy terms
- Certain claims arising from work performed before the claim, within the policy period
- Settlements or judgments up to selected limits
What it typically excludes
- Bodily injury and property damage, which general liability addresses
- Intentional, fraudulent, or criminal acts
- Claims known before the policy began
- Employment-related disputes, which EPLI addresses
- Cyber incidents, which cyber liability addresses
Hypothetical claim scenarios
These illustrative examples are for general understanding only. Coverage depends on the specific policy terms, conditions, and exclusions.
Missed deadline causes loss
A consultant misses a critical filing deadline and the client alleges financial harm. Professional liability may help respond to the claim and defense costs, subject to policy terms.
Software error
A client says a software provider's error disrupted operations and caused losses. The policy may help address the negligence allegation, subject to terms and exclusions.
Design oversight
A design firm is accused of an oversight that required costly rework. E&O coverage may help respond to the resulting professional-liability claim.
What commonly affects cost
- Profession and the complexity of your services
- Annual revenue and client contract sizes
- Claims history and risk-management practices
- Selected limits, deductibles, and retroactive date
- Whether coverage is claims-made and continuously maintained
How much does it cost?
On average, many businesses pay roughly $500–$2,000 per year for many small firms for professional liability insurance. That figure is a general national average only — your actual premium is set during underwriting.
- Professional Liability Insurance$500–$2,000 per year for many small firms
These are general national averages shown for comparison only — not a quote. Actual premiums vary widely with underwriting and depend on the factors above and the specifics of your business, including size, revenue, location, claims history, and the limits you choose. See how we estimate costs.
Industries where this coverage is common
Coverage needs vary business to business — most companies consider this protection regardless of industry. These are simply the industries where we see it most often.
See how this coverage works in your industry
A few examples from the business types we cover — this coverage applies well beyond the industries shown here.
Don't see your business type? Browse all industries we cover — coverage recommendations are tailored to every operation.
Frequently asked questions
What is the difference between E&O and general liability?
General liability commonly addresses physical injury and property damage, while professional liability (E&O) addresses financial harm from alleged mistakes, negligence, or failure to perform professional services.
What does claims-made mean?
Claims-made policies generally cover claims that are both made and reported while the policy is active, subject to the retroactive date. Maintaining continuous coverage helps avoid gaps.
Who commonly needs professional liability?
Consultants, technology firms, financial and healthcare professionals, and design firms commonly carry it, and many clients require it by contract.
Does it cover intentional wrongdoing?
No. Intentional, fraudulent, or criminal acts are generally excluded. Coverage focuses on alleged negligence and errors in professional services.
What is a retroactive date?
The retroactive date sets how far back covered work can reach. Work performed before that date is generally not covered, which is why continuous coverage matters.
How do I get a quote for this coverage?
Call The Southern Agency at 1-800-777-1872 or request a quote online, and an advisor can help tailor coverage to your business.
Related coverages
- Cyber Liability Insurance Response and liability coverage for data breaches and cyber incidents.
- Umbrella / Excess Liability Insurance Additional liability limits that sit above underlying policies.
- Employment Practices Liability Insurance Defense and liability coverage for employment-related claims such as discrimination or wrongful termination.
- Directors & Officers Insurance Protection for the personal liability of company directors and officers.