Professional Liability (Errors & Omissions) Insurance
General liability covers a client who trips in your lobby. It does not cover a client who says your advice, design, code, or deliverable cost them money. That is professional liability, also called errors and omissions, and it is a separate policy.
For any business that sells expertise, it is usually the exposure most likely to produce a lawsuit, and one that plenty of businesses find out they lack only when the demand letter arrives.
What it covers
- Claims of negligence, errors, or omissions in your professional services
- Missed deadlines and failure to deliver what was promised
- Legal defense even when the claim has no merit
- Settlements and judgments up to your limit
What it does not cover
- Bodily injury and property damage (general liability)
- Intentional wrongdoing and fraud
- Contractual penalties you agreed to beyond ordinary negligence
- Claims from before your retroactive date
Who needs it
Consultants, agencies, accountants, architects and engineers, software and IT firms, real estate professionals, and anyone whose client contracts include an indemnity or insurance requirement for professional services.
What drives the price
- Profession and the type of work performed
- Revenue and the size of your largest client contracts
- Contract practices, including use of written scopes and limitation of liability clauses
- Claims history
- Retroactive date and limits
Where owners get caught: letting a claims-made policy lapse
Professional liability is almost always written on a claims-made basis: the policy in force when the claim is made responds, not the one in force when the work was done. Switch carriers carelessly, or let coverage lapse for a month, and you can lose protection for every past project. Preserving your retroactive date is the first thing we check.
Professional Liability (E&O): common questions
What does claims-made mean?
A claims-made policy covers claims first made while the policy is active, for work done after the retroactive date. Keeping continuous coverage with the same retro date is what protects your past work.
Is tech E&O different from regular professional liability?
Technology E&O is professional liability designed for software, SaaS, and IT services, and it is usually paired with cyber coverage. Most tech clients will ask for both in the same contract.
I am a one person consultancy. Do I really need it?
If a client contract requires it, yes. If not, the question is whether a single unhappy client could fund a lawsuit against you. For most consultants, the defense costs alone justify the premium.
Professional Liability (E&O) in practice
Illustrative stories of businesses that needed it, and what else their review turned up.
A CPA Firm Bought E&O for Tax Mistakes. The Bigger Risk Was a Fake Email.
A twelve-person accounting firm had professional liability for errors in its work. The review found a claims-made trap in its switch of carriers, and a wire fraud exposure its E&O policy was never designed to cover.
E&OCyberEPLITechnologyAn App Studio's Enterprise Client Wanted Tech E&O. The Studio Had Never Heard of It.
A small app development shop won its first enterprise contract, then hit a procurement wall: $2 million of technology errors and omissions plus cyber coverage, due before signature.
E&OCyberEPLIProfessional servicesAn Architecture Firm Asked Its Umbrella to Cover Design Errors. It Can't.
A growing residential and small commercial architecture practice needed higher limits for a public project. The plan was to add an umbrella. The review showed why that would not have covered the exposure the client cared about.
E&OGLUmbrellaProfessional servicesThe Marketing Agency, the Stock Photo, and the Client Contract Nobody Read Closely
A fifteen-person agency got a demand letter over an image used in a client campaign. The review found its policies split the claim in a way that left a gap, and a client contract that promised more than the agency could insure.
E&OCyberGLHealthcareA Physical Therapy Clinic's Growth Plan Needed an HR Plan, and an Insurance Plan to Match
A two-location physical therapy practice was opening a third clinic and hiring fifteen people. The review found employment exposure, an owner's malpractice policy that didn't cover the clinic's other therapists, and a lease that asked for more.
EPLIE&OBOPLegal servicesA Small Law Firm's Trust Account and the Email That Almost Emptied It
A four-attorney firm handling real estate closings assumed its malpractice policy covered a stolen wire. The review found that malpractice, cyber, and crime coverage each covered a different piece, and the firm had only one of them.
CyberE&OBOPUsually written alongside
Cyber Liability
Ransomware, data breaches, and wire fraud. The claim small businesses are now most likely to file.
Learn moreGeneral Liability
Injury and property damage claims from customers, clients, and the public. The policy most contracts require.
Learn moreDirectors & Officers
Personal protection for founders, directors, and officers when management decisions are challenged.
Learn morePart of the programs we build for professional services and technology & startups.
Not sure your professional liability (e&o) coverage fits?
Send us what you have. We review it line by line against your leases and contracts, and tell you plainly what is missing. Free, and no obligation.