Professional Liability Insurance

Professional Liability Insurance

Financial protection for claims alleging negligence or failure to deliver a service as promised.
Protect your practice with Professional Liability Insurance.

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professional liability coverage

What does Professional Liability Insurance cover?

Professional Liability Insurance protects professionals from client claims alleging financial loss due to a product or service you provided, as well as claims alleging negligence, misconduct, and failure to deliver services as promised.

Professional Liability Insurance typically includes coverage for legal costs and damages related to the following coverage areas:

  • Professional  Services: Negligence or errors related to your services, or failure to deliver a service as promised.
  • Products: Failure of your  product (e.g., it didn’t work as intended) or a physical injury (e.g., overheating device causing a burn).
  • Media and Advertising: Media services resulting in your client getting sued for defamation, libel, or slander.

Professional Liability Insurance typically does not provide coverage for: 

  • Criminal, dishonest, or fraudulent acts (you need Crime Insurance);
  • Violation of securities acts;
  • Cost guarantees or price estimates; or, 
  • Incorrect estimates of profits or economic returns.
professional liability requirements

Who needs Professional Liability Insurance?

Depending on the profession, it may be referred to as Errors and Omissions Insurance or Medical Malpractice Insurance. For some professions, carrying Professional Liability Insurance is required to practice.

You need Professional Liability Insurance if:

  • You provide advice or offer services in exchange for a fee.
  • You provide or develop products or
professional liability costs

What is the cost of Professional Liability Insurance?

For a basic Professional Liability Insurance policy with a limit of $100,0000, you can anticipate spending approximately $250 annually.

The cost of your policy will depends on several factors, such as:

  • Industry and Services Offered
  • Years of Experience
  • Number of Employees
  • Annual and Projected Revenue

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Common scenarios where Professional Liability Insurance is useful

Ad Agency Being Sued

Problem: The code you wrote for a client resulted in their website going down at a critical time.

Outcome: Your client successfully sues you for the sales they lost as a result of the website being down. Your Professional Liability Insurance covers the legal expenses and payout, totaling $78,000.

Accountant making mistake

Problem: You are an accountant and you accidentally make an administrative error, which results in your client owing a large amount of money in taxes.

Outcome: Your client sues you for negligence. Your Professional Liability Insurance covers the legal expenses and monetary judgment, totaling $89,000.

Consultant with bad advice

Problem: You suggest a communications strategy to your client that promises a large return on investment. Unfortunately the client follows your recommendation but does not see the savings you promise.

Outcome: They successfully sue you for the financial loss. Your Professional Liability Insurance covers the payout and legal expenses, totaling $190,000.

Which professions require Professional Liability Insurance?

Regardless of the type of professional services business you run, professional liability insurance is critical:

  • Accountants

  • Accounting Firm

  • Actuaries

  • Advertising

  • Aerial and ground based Photographers / Videographers

  • Alternative Energy

  • Architects & Engineers

  • Appraisers

  • Bookkeepers

  • Broadcasters

  • Building Designers (Bill 124)

  • Business Consultant

  • Chiropodists

  • Civil engineers

  • Collection Agencies

  • Consultants

  • Chiropractors

  • Design Firms

  • Directors and Officers

  • Employment Agencies/Recruiters

  • Engineers

  • Environmental Engineers

  • Energy Audits & Assessments

  • Financial Advisors

  • Financial Planners

  • Foreign Legal Consultants

  • Holistic Professional

  • Hotel Consultant

  • Home Inspectors

  • Human Resources (HR) Consultant

  • Immigration Consultants

  • Information Technology & Computer Consultants

  • Interior Designers

  • IT Contractor

  • IT Specialist/Technician/Programmer

  • Independent Contractor

  • Product Designers

  • Professionals Liability

  • Lawyer’s Excess Professional Liability

  • Management Consultants

  • Medical Related

  • Medical Professionals (Malpractice Insurance)

  • Medical Students (Malpractice Insurance)

  • Multimedia designers

  • Mortgage Brokers

  • Naturopaths

  • Occupational Health and Safety Consultants

  • Quality Control Consultants

  • Placement Agencies

  • Podiatrists

  • Process Servers

  • Private Investigators

  • Project Managers

  • Property Managers

  • Paralegals

  • Publishers and Printers

  • Recruitment and Employment Agency

  • Recruitment Consultants

  • Safety Engineers

  • Service Organizations

  • Solar & Wind Farm Engineers & Consultants

  • Staffing Agencies

  • Structural Engineers

  • Sub Contractor

  • Surveyors

  • Therapist Professionals

  • Training Providers/Trainers

  • Travel Agencies

  • Travel Agents, Tour operators

  • Web-Site Designers

  • Web Developers

  • Workplace Engineers & Consultants

Frequently Asked Questions about Professional Liability Insurance

Why do I need professional liability coverage in addition to commercial general liability coverage?

Insurance policies are created with the intent of covering a large number of business segments. Every business is unique as to what they offer and how they are operated, due to these individual complexities it is almost impossible for one single insurance policy to cover everything a business may offer. Your basic insurance policy, Commercial General Liability covers any claims of your business causing injury or loss whether it be to a customer, tenant, or landlord. These policies do not, however, cover your professional advice and services, management decisions, physical property, computer systems, data and other potential loss exposures that might exist within your business model.

Who needs professional liability insurance?

It’s recommended for professionals who provide a service or advice, whether they work within a group of professionals or as solo entrepreneurs. For example: doctors, lawyers, accountants, management consultants, marketers, financial planners, engineers etc.


What does professional liability insurance cover?

Professional liability insurance covers financial loss or bodily injury caused to a third party due to a service you provided. It covers legal costs and settlements, usually hefty fees that can cripple a small business or individual practitioner if they had to pay it out of their own pocket.

How much professional liability coverage do I need?

The most common professional liability coverage that business owners, consultants or practitioners opt for is the $1M/$2M coverage ($1M max pay out for a single claim during a year, $2M max pay out for all claims throughout a year). If you believe risks are higher in your industry or for your specific business, you should consult with your broker about getting a policy with higher limits.

Does professional liability insurance cover errors and omissions?

Yes. professional liability insurance covers errors and omissions in the service or advice provided by professionals. In fact, the terms ‘professional liability insurance’ and ‘errors and omissions insurance’ actually refer to the same type of policy.

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