If your business is in the practice of providing professional advice and or service to others, you likely will need professional liability coverage. This helps protect you when defending against a negligence claim made by a client, and damages awarded in a civil lawsuit. The coverage focuses on claims of alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by you. These are causes for legal action that would not be covered by a more general liability insurance policy that addresses more direct forms of harm. Professional liability insurance may take on different forms and names depending on the profession, especially medical and legal, and is sometimes required under contract by other businesses that are the beneficiaries of the advice or service. At Keslar Insurance, we have commercial insurance specialists that can help you with deciding if this type of coverage makes sense for you.
Professional Liability Insurance – Frequently Asked Questions
1. What is professional liability insurance?
Professional liability insurance protects businesses and individuals against claims of negligence, mistakes, or failure to perform in professional services. It’s often required in industries where expert advice, design, or service is provided.
2. Who needs professional liability insurance?
This coverage is essential for professionals such as consultants, attorneys, architects, engineers, therapists, and medical providers—anyone who provides a specialized service or advice.
3. How is this different from general liability insurance?
General liability covers physical injuries and property damage. Professional liability covers financial harm resulting from your services, such as errors, misjudgment, or failure to deliver as promised.
4. What types of claims does professional liability insurance cover?
Claims of professional negligence, inaccurate advice, misrepresentation, missed deadlines, or breach of duty. For example, if a design flaw causes a client financial loss, this policy responds.
5. Is professional liability required by law?
It depends on your profession and location. Some industries (like medical and legal) require it by regulation, while others need it to meet client contract requirements.
6. Does it cover intentional wrongdoing?
No. Professional liability insurance does not cover intentional fraud, criminal acts, or knowingly wrongful conduct.
7. How are policies written—claims-made or occurrence?
Most professional liability policies are claims-made, meaning coverage applies only if the claim is made while the policy is active (or during an extended reporting period).
8. What is a retroactive date, and why does it matter?
The retroactive date is the earliest point from which coverage will apply. It’s important not to let coverage lapse, or you could lose protection for past services.
9. What are common limits of coverage?
Limits vary by profession and contract requirements but often range from $500,000 to $5 million. We’ll help you choose the right amount based on your risk.
10. Can I bundle this with other business policies?
Yes! We often bundle professional liability with general liability, cyber liability, or a Business Owner’s Policy (BOP) when appropriate.
