Professional liability vs. errors and omissions insurance

Insureon Staff.
Professional liability and errors and omissions insurance both protect businesses from expensive lawsuits caused by unsatisfactory work. The language used may differ by industry.
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Insurance lingo isn't always easy to understand, especially when a policy goes by multiple names. 

Such is the case with professional liability insurance, also known as errors and omissions (E&O) insurance.

Is professional liability the same as errors and omissions insurance?

Errors and omissions and professional liability insurance offer identical coverage. While the two policies are the same, different industries use different terms to refer to the same coverage.

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Professional liability vs. E&O vs. malpractice insurance

Many industries use the terms “E&O insurance” and “professional liability insurance” interchangeably. You may also hear these policies called “malpractice insurance.” 

Common industry names for this policy include:

No matter the name, this coverage protects you from lawsuits if you make a work mistake, fail to complete a project, miss a deadline, or are accused of professional negligence.

How professional liability insurance protects your business

Businesses that provide professional services typically need professional liability / errors and omissions coverage because those services come with risks. A client could hold your business liable for:

  • Breach of contract
  • Work oversights or errors
  • Providing substandard or incomplete work
  • Missed deadlines

If these professional mistakes result in financial losses for a client, they could sue to recoup expenses. Professional liability / E&O insurance helps cover:

  • Attorney fees
  • Court costs
  • Settlements or judgments

Even if there was nothing wrong with the quality of your work, a difficult or dissatisfied client could sue your business over a perceived problem. In that case, you might win the lawsuit but still have to pay attorney fees and court costs out of pocket. Without professional liability and errors and omissions insurance, a lawsuit could present a major financial difficulty for your business.


Many clients will require your company to carry this policy before they hire you.

The benefits and cost of professional liability insurance

Professional liability insurance helps you market your business as trustworthy and responsible, setting you apart from uninsured competitors. It’s not just good for business – it’s often a must for business.

Many clients will require your company to present a certificate of insurance for this policy before they hire you. If a project doesn't go as planned, they feel assured they can recoup their losses. Review your contract carefully to see if this coverage is a requirement.

Insureon’s professional liability insurance cost report offers details on how much businesses in different industries can expect to pay for this coverage. Building designers pay the highest professional liability premiums, averaging $1,705 per year, while finance and accounting professionals pay just $400.

Compare professional liability insurance quotes from trusted providers with Insureon

Our easy online application lets you compare quotes for professional liability insurance from top-rated U.S. insurers. Once you find the right policy, you can begin coverage in less than 24 hours.

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