This policy, also known as errors and omissions insurance, protects businesses against client lawsuits claiming that work was unsatisfactory, negligent, late, or never completed.
Professional liability insurance is designed for professionals who make a living off their expertise. It addresses risks unique to providing specific services, such as an engineer who misses a project deadline or an architect who makes a mistake with plans for a building.
If the client sues, this policy covers the cost of a lawsuit up to your policy limit. Clients may request a certificate of insurance as proof that you have this coverage.
Professional liability insurance is also called errors and omissions insurance (E&O). Different industries and professions have adopted different names for this coverage, even though it’s otherwise identical.
Professionals who use the term professional liability insurance include:
Professionals who instead use E&O include:
Professional liability insurance for accountants and auditors covers the costs of lawsuits based on accounting errors, data entry errors, miscalculations, or lost documentation. Because the policy offers indirect financial protection for the client, some clients will require proof of insurance before they agree to work with your firm.
Professional liability insurance protects architects against accusations that a building design does not meet project specifications, was delivered late, or contained errors. A client contract might include a clause that requires this policy’s protection.
Professional liability insurance for consultants offers financial compensation for lawsuits alleging ineffective advice or inaccurate projections. Before they agree to work with you, some clients may ask you to provide proof of professional liability insurance.
Professional liability insurance for engineers provides financial protection from lawsuits stemming from disputes like cost overrun, delivery delays, and problems with construction materials. You may need to provide proof of professional liability insurance to a client, partner, or licensing board for some projects.
Find more answers to frequently asked questions about professional liability insurance.