Professional Liability Insurance (Errors & Omissions)

What professional liability insurance covers

Professional liability insurance protects you when a client says your work, advice or service caused them a financial loss. Depending on the profession, it may be called errors and omissions (E&O) insurance, malpractice insurance, or simply professional liability.

Typical covered claims include:

• Negligence: the client says you did not do the work with reasonable care.
• Errors and omissions: you made a mistake or left something out.
• Missed deadlines: a late delivery caused the client to lose money.
• Bad advice: your recommendation led the client to a costly decision.
• Breach of professional duty: the client says you did not meet the standard expected in your field.

The policy pays for your legal defense, plus settlements or judgments up to your limit. Defense costs are often the largest part of a claim, and you get that help even when the claim has no merit.

Example: A consultant recommends a new process to a client. The rollout goes badly, and the client sues, saying the advice cost them a major contract. Professional liability pays the consultant's lawyer and any settlement, up to the policy limit.

What it doesn't cover

Professional liability is about financial harm from your services. It does not cover:

• Physical injuries or property damage. A client tripping over your laptop bag is a general liability claim. See general liability vs. professional liability.
• Employee injuries, which need workers' compensation.
• Intentional wrongdoing, fraud or criminal acts.
• Your own property, like your computers and office.
• Data breaches in many cases; a separate cyber liability policy is designed for that.

Who needs professional liability insurance?

If clients pay you for expertise, judgment or a professional result, you need E&O. Common examples:

• Consultants and IT consultants
• Real estate agents
• Therapists and physical therapists
• Photographers, videographers and event planners, whose clients can claim a ruined or missed event
• Personal trainers and fitness instructors, who give exercise guidance

Many client contracts require proof of E&O before you start work. Some professions and states also have their own requirements, so check with your licensing board.

How much does professional liability insurance cost?

According to Insureon's 2026 data from 100,000 small-business customers, the median cost of professional liability (E&O) insurance is $88 a month. Your price depends on:

• Your profession. Some fields have more frequent or larger claims.
• Revenue and number of clients. More work usually means more exposure.
• Limits and deductible. Higher limits raise the premium; a higher deductible lowers it.
• Experience and claims history. A clean record helps.
• Contracts. Large or high-stakes contracts can increase risk.

Compare this with general liability, which has a lower median of $45 a month. See the full picture in how much does business insurance cost, or estimate your own price with the business insurance cost calculator.

Claims-made coverage, limits and deductibles

Most professional liability policies are claims-made. That means the policy that is active when the claim is filed is the one that responds, and the incident usually has to happen after your retroactive date. Two things follow:

• Keep coverage continuous. A gap can leave older work uncovered.
• Ask about tail coverage (an extended reporting period) if you retire, close the business or switch to a policy with a later retroactive date.

Limits are usually shown as per claim and aggregate (for example $1 million / $2 million). Check whether defense costs are paid inside the limit (they reduce what's left for settlements) or outside it. E&O policies usually have a deductible, which you pay toward each claim.

How to buy professional liability insurance

Work with a licensed agent or broker who knows your profession, or get quotes from insurers and online marketplaces. Describe your services accurately on the application, because a misdescribed service can lead to a denied claim. Confirm the limits match your contracts, ask for your certificate of insurance, and set a reminder to renew on time so your coverage stays continuous.

Examples of professional liability claims by profession

These illustrative examples show how E&O claims start in different fields:

• Example: An IT consultant misconfigures a client's backup system. When the client's server fails, months of data are lost, and the client sues for the cost of rebuilding records.
• Example: A real estate agent is accused of not disclosing a known problem with a property, and the buyers sue for repair costs.
• Example: A photographer loses a memory card with a couple's wedding photos. The couple demands a refund and money to restage portraits.
• Example: An event planner books the wrong date at a venue, and the client has to pay rush fees to rebook vendors.
• Example: A personal trainer is accused of giving a client an unsafe program that led to an injury, and the client claims the trainer's guidance was negligent.

In each case, the claim is about the quality of the professional service, not a slip-and-fall or broken property. That is the line between professional liability and general liability.

Professional liability, E&O and malpractice: what's the difference?

These names describe the same idea: coverage for claims about the quality of a professional service. "Errors and omissions" is common for consultants, technology firms and real estate agents. "Malpractice" is used for healthcare and counseling professions, such as therapists and physical therapists. The details of each policy differ, so always read the coverage terms and exclusions rather than relying on the name.

How to lower your E&O premium and your risk

• Use written contracts. Define the scope of work, deliverables, deadlines and what you are not responsible for.
• Document everything. Keep emails, change requests and approvals. Good records help your defense.
• Set expectations. Many claims start with a misunderstanding about what the client was paying for.
• Choose a sensible deductible. A higher deductible usually lowers the premium.
• Keep a clean claims history and continuous coverage, which insurers reward at renewal.
• Stay current. Continuing education and following industry standards can reduce mistakes, and some insurers ask about them.