What Is Professional Liability Insurance?

Professional liability insurance protects service businesses when dissatisfied clients file lawsuits.
Rosalie MurphyAug 11, 2021

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Professional liability insurance is a type of that protects you if a client files a lawsuit over an alleged or actual mistake or bad piece of advice.

If you have a job that provides professional services — such as an architect, lawyer, doctor or accountant — clients expect you to perform that job well. If you make a mistake or a client thinks you made one, you could face a lawsuit.

Errors and omissions insurance, medical malpractice insurance and legal malpractice insurance are types of professional liability insurance. In general, anyone who provides a service to clients should consider professional liability insurance, and many professionals are required to carry it.

Professional liability insurance can protect businesses against the following kinds of claims, including covering legal and settlement costs:

Unlike some other , professional liability policies generally protect against claims of financial losses, not bodily injury or property damage. Medical malpractice insurance is an exception to that rule, though, as are policies for architects and engineers.

is a term used interchangeably with professional liability insurance in many industries.

Professional liability doesn't protect a business against:

In general, professional liability policies have to be in place at the time a claim is filed in order to pay out. You may be able to purchase additional coverage for a set period of time before the policy start date. But if you let your coverage lapse, you’ll probably lose protection.

Anyone who provides professional services or advice to clients for a fee faces the risks that professional liability insurance protects against. This list can include:

Medical professionals may be required by law to carry medical malpractice insurance. This kind of professional liability insurance specifically protects physicians, dentists, psychologists and other medical professionals against claims that they made a mistake that led to a patient’s injury or death.

Professional liability insurance may be required in other fields as well. For example, state licensing bodies may require lawyers to carry legal malpractice insurance or to tell clients whether or not they have it.

Many commercial insurance companies offer professional liability insurance. can help you find the lowest rates and best coverage.

The cost of professional liability insurance depends on:

Insureon says its customers pay a median of $59 per month for professional liability insurance. In 2020, customers paid an average of $46 per month for professional liability insurance through Progressive's Advantage Business Program.

Professional liability insurance isn't sold as part of a and must be purchased separately. Talking to an or agent can help you assess your risks and understand what kinds of business insurance you need.

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