Professional Liability Insurance Cost Analysis
How Much Does Professional Liability Insurance Cost?
The average yearly cost of Professional Liability Insurance for a small business, regardless of the limits chosen or the industry of the business, was $985.49. The median was $758.00. The least expensive Professional Liability policy in our sample was just $250, while the most expensive was $21,170. That's a wide range, but, as you'll see below, most small business owners that buy through insureon pay between $400 and $1,000 per year, with the largest portion (just over a quarter) paying between $600 and $800.
Professional Liability in Detail
Asking how much Professional Liability Insurance costs is a bit like asking how much a car costs. The best answer is: it depends. Unlike with cars, though, most business owners don't even know the range of prices to expect when shopping for Professional Liability Insurance. This page is designed to fix that.
So first: while the cost of a policy depends largely on a business's industry, size, and day-to-day operations, it's still useful too look at average costs and cost ranges.
On this page, you'll find a close look at small business Professional Liability costs powered by data from a representative sample of 15,000 Professional Liability policies we sold in 2014.
Our sample includes only businesses that had 10 or fewer employees. In this group, two factors had the biggest impact on price:
- The policy limits a business chooses
- The industry a business is in
What Do Small Businesses Pay for Professional Liability Insurance?
Insureon serves lots of different types of businesses, and the following graph makes that clear. It shows the range of what small businesses pay in annual Professional Liability premiums. See for yourself:
The most notable takeaway? More than half of insureon customers pay less than $1,000 per year in Professional Liability premiums. In other words, for less than $85 per month, most insureon customers are able to get Professional Liability coverage.
Professional Liability: Policy Limits Drive Pricing
Every Professional Liability Insurance policy comes with two limits:
- Occurrence limit: This is the maximum amount the insurer will pay for any one claim made during the life of the policy.
- Aggregate limit: This is the maximum amount the insurer will pay in claims for the lifetime of the policy (usually one year).
Often, limits are represented like this: occurrence / aggregate. So a $1M / $2M policy will pay up to $2 million for all claims during the policy's lifetime and up to $1 million for any one claim made during that period.
Because they determine how much coverage a business receives, policy limits have a huge impact on the cost of insurance. Some businesses find that their client contracts require that they have Professional Liability coverage with certain limits; others have to choose limits based on their likely exposures. Take a look at the graph below to see how policy limits affect the cost of a Professional Liability policy.
The policies that offer the most coverage cost the most, and those that offer the least coverage are much less expensive.
So which policy limit do small businesses choose most often? The runaway winner among insureon clients is $1M / $1M, which accounted for more than 60 percent of the Professional Liability policies we sold in 2014. Another 18 percent of businesses chose lower limits, meaning policies with limits higher than $1M / $1M accounted for less than 20 percent of the policies we sold.
Here's a breakdown of the popularity of various Professional Liability limits:
Even when two businesses choose a policy with the same limits, though, that doesn't mean they'll pay the same price. That's because limits are only one of the factors that affect the cost of insurance. In the next section, we'll take a look at how industry affects the cost of a policy. To get an idea of what small businesses pay for policies with $1M / $1M limits, take a look at this chart.
Professional Liability Insurance: Industry Drives Pricing
The other big factor that impacts the cost of Professional Liability Insurance is a business's industry. So we can show you apples to apples, we've laid out how much a policy with $1M / $1M limits costs for a variety of professions.
Notice how architects and engineers pay a lot more for their insurance than business consultants. That's because if an architect or engineer makes a mistake, a building might collapse and people might die. If a marketing consultant messes up, it's likely that losses won't extend beyond lost revenue for their client. When the potential cost of a professional mistake is higher, the cost of Professional Liability Insurance is higher, too.
Dig Deeper into Insurance Costs
Insurance costs vary greatly based on the type of insurance a business buys. Learn more about how much each of these insurance policies costs for small businesses.
Business Insurance Cost Analysis Home
To get a more nuanced view of what Professional Liability Insurance costs for businesses in the your industry, take a look at these cost analysis pages by industry. (Don't see your industry? Check back in a few weeks — we're in the process of adding more!)
Architects & Engineers
Insurance Agents & Agencies
IT Businesses, Consultants & Subcontractors
Janitors, Maids, and Other Cleaning Businesses
Real Estate Professionals
Restaurants, Bars, Catering & Other Food Services Businesses