Mistakes and omissions
Claims that your work or advice was wrong, late or incomplete and cost the client money.
What to watchThe policy covers the services listed on it. If you add a new service, tell us.
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Professional liability
Professional liability insurance for firms that give advice and deliver work
Professional liability insurance, also called errors and omissions, covers claims that your advice, service or work cost a client money. It pays for lawyers to defend the claim as well as any settlement the policy covers.
Who needs it
Any business that could be sued over a mistake, a missed deadline or advice that turned out badly, even one that did everything right.
- Management, HR and technology consultants
- CPA firms, bookkeepers and tax practices
- Software developers, online service companies and IT providers
- Architects, engineers and design professionals
- Advertising, marketing and communications firms
- Staffing firms, trainers and other professional services
What it covers
What is covered, and what to watch
Summaries only. The policy wording governs, and every insurance company's policy is different.
Cost of lawyers
Attorney fees, expert witnesses and court costs, which often exceed the eventual settlement.
What to watchWhether legal fees count toward the limit matters. A $1 million limit can be used up by the defense before any settlement.
Licensing board and regulator complaints
Many policies include a small amount for responding to a licensing board or regulator.
What to watchUsually a small amount. Accountants and financial professionals should check it.
Being called as a witness
Costs to respond when you are pulled into a client's lawsuit as a witness rather than a defendant.
What to watchNot on every policy. Firms that hold client records should ask for it.
Earlier work
Work done before the policy started, back to a start date written into the policy.
What to watchSwitching insurers can reset that date. We ask the new insurer to keep your existing one when we move a policy.
Coverage after you close or retire
The option to keep reporting claims after the policy ends, when you retire, sell or close the business.
What to watchUsually must be bought within 30 to 60 days of ending the policy. Plan for it before a sale closes.
How we work
An independent agency, so the policy fits you and not the other way around
Many insurance companies, one agent
We are appointed with national and specialty companies, so your policy goes where it fits rather than where we happen to have a contract. See who we work with.
Plain English, line by line
Send your current policy and we compare it with what we would offer: what we would keep, what we would change, and why, in writing.
Nothing changes until you say so
No coverage starts and no policy changes until a licensed agent confirms it with you in writing. You always know what you have. How we work, in full.
Exclusions
What it does not cover
- Injuries and property damage, which belong on general liability
- Deliberate dishonesty, fraud and criminal acts
- Arguments over fees, and promises of a particular result
- Claims about work done before the start date written into the policy
- Claims by employees, such as discrimination or wrongful termination, which need their own policy
Where a claim lands depends on the facts. Clients often carry both professional and general liability because a single incident can touch both.
How to get it
From first call to bound coverage
- 01Describe the servicesWhat you do, for whom, and how much of your revenue each service brings in.
- 02Send your contractsEngagement letters and clauses that limit your liability shape the risk and the price.
- 03Set the limit and the start dateWe match the limit to your contracts and ask the new insurer to keep any start date you already have.
- 04Review every yearNew services, new clients and new contracts change the risk. The renewal review catches them.
Common questions
What is the difference between professional and general liability?
General liability is for physical harm: someone injured at your office, property you damage at a client's site. Professional liability is for financial harm from your work or advice. Most firms need both.
Our clients require $1 million of errors and omissions coverage. Is that typical?
Yes. $1 million per claim and $2 million for the year is a common contract requirement. Larger clients and government contracts often ask for more. Send us the contract and we will quote to it.
What is the start date written into the policy?
Insurers call it the retroactive date. It is the earliest date of work the policy will respond to. For a first-time buyer it is usually the day the policy starts. If you have been continuously insured, that date should carry forward when you renew or switch insurers.
What happens if I let the policy lapse?
Coverage for all your earlier work ends with it, because this kind of policy only responds to claims reported while it is in force. If you are closing or selling the business, buy the extended reporting option instead of simply canceling.
Does it cover cyber incidents?
Not usually. A professional liability policy may respond to a client's loss from your error, but the cost of handling a breach, ransomware or notifying people needs a cyber policy.
Related
Often placed alongside
Media liability
Covers claims of defamation, privacy, copyright and trademark against agencies, publishers and content studios.
Media liabilityCyber insurance
Covers the cost of a breach, ransomware, payment fraud and the claims that follow a data incident.
Cyber insuranceGeneral liability
Covers injuries and property damage your business causes to others, and satisfies the proof of insurance landlords and clients ask for.
General liabilitySend us the schedule
Production, media and professional liability are quoted by an agent. Start with QuickStart or an interview and we will tell you what we need.