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What is professional liability insurance?

Professional Liability Insurance / Errors and Omissions Insurance (E&O)

This type of insurance is intended to help with claims that arise from your negligence, error, or omission while performing your professional services.

Professional Liability vs General Liability

A key difference from general liability is that professional liability, generally speaking, is intended to respond to claims for financial losses, as where general liability may deal more with claims for bodily injury or property damage. Never assume that your general liability policy provides professional liability.  

Why do I need E&O Insurance?

Examples of Professional Liability Claims or E and O Claims

These are just a few of the countless potential claims:

  • a tax preparer may accidentally transpose a number incorrectly – the client sues fines and other consequences
  • an interior designer orders the wrong furniture for a restaurant and the business is not able to open – the client sues for lost income
  • an ergonomic consultant determines that an office can accommodate a specific amount of desks for ideal efficiency, after advising the owner to purchase the desks, he finds that he was not accurate and 50 employees are left without workstations – the client sues for lost income
  • a grant writer drafts a grant for a client and the client loses the grant because the grant writer did not use the correct data when requesting the grant, or at least the client claims that was the case.