Find professional liability insurance quotes
Save money by comparing insurance quotes from trusted carriers.
Professional Liability Insurance in New Jersey
What kind of work do you do?
Choose from the nation's best insurance providers
Professional liability insurance in New Jersey
Professional liability insurance coverage protects small business owners against the cost of client lawsuits over unsatisfactory work. For certain professions, it is required by law to carry in New Jersey. Even when not required, it's strongly recommended for professional service providers.
What is covered under professional liability insurance in New Jersey?
Professional liability insurance, also called errors and omissions insurance (E&O), covers the cost of lawsuits related to the quality of your work, including legal fees and settlements.
It covers the following types of professional negligence claims for many New Jersey businesses:
- Missed deadlines and undelivered services, such as a web designer who fails to finish a website before a client’s busy season.
- Negligent work, such as an architect who creates an unsafe building design.
- Mistakes and oversights, such as an accountant who makes a mathematical error or fails to include the right data in their work.
- Poor advice, such as an attorney who misinterprets a legal statute that results in a costly mistake.
- Medical malpractice, such as a doctor who accidentally orders the wrong prescription for a patient.
New Jersey state law requires malpractice coverage for doctors. It’s essential in a setting where a mistake could cause a bodily injury or worsen a medical condition.
Who should carry professional liability insurance in New Jersey?
Any business that provides a professional service or expert advice should carry professional liability coverage, as a client could sue if your service or advice causes accidental harm. Even a frivolous lawsuit can be expensive due to attorneys' fees, court costs, and other expenses.
Industries often at risk for professional liability claims include:
Technology professionals
IT consultants and other tech professionals are susceptible to lawsuits related to system downtime, project delays, and coding errors that impact a client's bottom line.
In this industry, tech professional liability insurance is referred to as errors and omissions insurance. It's commonly bundled with cyber insurance into one policy—tech E&O.
Tech E&O provides crucial protection by covering legal defense costs related to all of the above, in addition to lawsuits stemming from a data breach or cyberattack.
Building design businesses
Those who work in building design, such as architects and engineers, are at risk of a lawsuit if a client accuses them of making a costly mistake. For example, a bridge could develop cracks over time, or a project could be delayed for months due to unforeseen circumstances.
Insurance professionals
Insurance professionals, including agents and insurance brokers, deal with large amounts of financial data and at times have to use their best judgment in advising their clients. If a client doesn’t have enough coverage, or the right type of coverage, they might blame their agent or the insurance agency for failing to make sure they were protected.
Even if you’ve done nothing wrong, a disgruntled customer might file a lawsuit if your advice leads to a financial loss.
Get professional liability insurance for your New Jersey business
Is professional liability insurance required in New Jersey?
New Jersey law requires some small business owners to have a professional liability insurance policy. However, even if it's not required, you might need this coverage to sign a contract or to get a license in your field.
Healthcare professionals
Professional liability is referred to as medical malpractice insurance when it applies to doctors and other healthcare professionals, such as therapists.
Physicians are required to carry medical malpractice insurance, but other healthcare workers, such as nurse practitioners and certified nursing assistants, are not.
Malpractice insurance is essential in a setting where a mistake could cause a bodily injury or worsen a medical condition.
Real estate professionals
New Jersey doesn’t require real estate agents to have E&O insurance, but clients may ask their agent to have this coverage and stipulate proof of insurance in business contracts.
Additionally, real estate agencies may require their agents and brokers to carry this policy in order to provide services.
Common E&O claims in the real estate industry include misrepresentation of a property's size or condition, failure to disclose a property's flaws, and inaccurate appraisals.
Attorneys
For lawyers, professional liability is also known as legal malpractice insurance. New Jersey does not require this coverage for individual attorneys.
However, most law firms and individually practicing lawyers purchase this policy in order to protect against the heavy costs of malpractice lawsuits. Limited Liability Partnerships are also required to carry professional liability, according to New Jersey state law.
Top professions that need professional liability insurance
Don't see your profession? Don't worry. We insure most businesses.
How much is professional liability insurance in New Jersey?
The average cost of professional liability insurance nationwide is $61 per month. In New Jersey, the average cost is $72 per month.
The cost of professional liability coverage depends on several factors, such as:
- Your type of business, industry, and similar risk factors
- Coverage limits and deductible
- Your business size
- Location, such as Newark, Trenton, or Jersey City
- Day-to-day operations
- Your claims history
Verified professional liability coverage reviews
Hear from customers like you who purchased professional liability insurance.
How does professional liability insurance work in New Jersey?
Professional liability insurance covers your legal defense costs if you’re sued over a mistake in your professional work, and it's affordable for low-risk businesses.
Even if you’ve done nothing wrong, a legal battle can be expensive. In addition to your attorney’s hourly rate, you’ll likely be charged for administrative costs such as copying, filing, and travel expenses. You may also have to pay for expert witnesses to testify on your behalf, a court-ordered legal judgment, or a settlement to avoid trial.
Professional liability insurance covers all of the above, up to the coverage limits of your policy. The policy limits you choose should take into account how expensive it can be to fight a professional liability lawsuit.
You also need to determine the amount of coverage required to obtain a contract or work in a certain field. Different industries carry different risks, and only certain professions are mandated by the state to carry professional liability insurance.
For example, certain medical professionals in New Jersey are required to carry medical malpractice insurance with a minimum coverage amount of $1 million per occurrence and $3 million per policy year.
You may also like
Professional liability vs. malpractice insurance
Professional liability and malpractice insurance both protect against professional liabilities a business might face. However, they cover two separate types of claims, and you may need to purchase one or both policies depending on your risks.
Are there any exclusions in professional liability insurance?
A professional liability policy covers a wide range of lawsuits, but it will not cover intentional harm you cause to others.
Most insurance companies exclude:
- The illegal violation of any law, regulation, or statute
- Any services you provide under the name of another entity, such as a subsidiary business or organization not listed on your policy
- Defamation, such as libel and slander
- Discrimination
You may also like
General liability vs. professional liability insurance
General liability and professional liability insurance both protect against common small business liabilities, but cover two different types of lawsuits. You may need to purchase one or both policies depending on your risks.
Does general liability insurance include professional liability coverage?
General liability insurance does not include professional liability coverage, though both policies cover claims from customers.
In short, general liability provides financial protection against accidents involving people outside your business, while professional liability covers claims of negligence, such as failure to complete a project on time.
General liability covers the most common types of customer and client claims. That includes customer injuries, customer property damage, and advertising injuries. If a customer falls and suffers an injury at your office, it would be covered by your general liability policy, which would include your legal defense costs.
If someone sues you over unsatisfactory work, it would be covered by your professional liability coverage.
What other types of insurance should NJ businesses consider?
General liability and professional liability are often the first two policies bought by small business owners. However, they are not the only types of business insurance that policyholders might need.
- Workers’ compensation insurance is required for all employers in New Jersey, even if the company only has one employee. It covers medical costs and disability benefits for work-related injuries and illnesses.
- Commercial property insurance covers your business’s physical location and equipment. It’s often required to sign leases.
- A business owner’s policy (BOP) combines general liability coverage and commercial property insurance. It's usually less expensive than buying each policy separately.
- Commercial auto insurance is required in New Jersey for any vehicles used solely for work purposes.
- Cyber insurance covers the cost of dealing with a data breach or malicious software attack.
- Employment practices liability insurance (EPLI) is a type of management liability insurance. It protects against legal costs related to employee claims of harassment, discrimination, and wrongful termination.
How do I get professional liability insurance for my New Jersey business?
Complete Insureon’s easy online application today to compare insurance quotes from top-rated U.S. insurance carriers.
Our New Jersey licensed insurance agents can help answer any questions and find coverage that matches your business needs. Once you find the right policies, you can begin coverage and get your certificate of insurance in less than 24 hours.
Updated: August 26, 2025
EXPLORE ON INSUREON
Who needs professional liability insurance?Frequently asked questions about professional liability insuranceHow do I start a professional liability insurance application?Professional liability insurance for the self-employed and independent contractorsBest professional liability insurance for small businessesWhat is malpractice?
SHARE THIS ARTICLE
