3 minute readBusiness
Professional liability, also called errors and omissions or malpractice depending on the field, covers claims that your professional services caused financial harm. It pays defense costs even when the allegation is unfounded — which is the most common real-world scenario.
What you need to know
Claims-made mechanics
Coverage responds based on when the claim is made, so retroactive dates and continuous renewal matter enormously.
Tail coverage
If you cancel or retire, an extended reporting period keeps past work covered.
Defense inside or outside limits
Whether defense costs erode your limit is a key difference between policies.
Common mistakes
- Setting property and income limits from rounded-down guesses instead of real numbers.
- Skipping hired and non-owned auto because the business owns no vehicles.
- Signing contracts that require limits or wording the policy does not provide.
- Letting subcontractor certificates lapse, which shows up at audit.
- Treating insurance as a one-time purchase while the business keeps changing.
When to talk to an agent
Talk to an agent before signing a lease or a major contract, when you hire your first employee, when revenue or payroll changes materially, and any time you add a service, location or vehicle.
Frequently asked
This article is general information, not a policy or a promise of coverage. What your policy pays depends on its specific terms, limits and exclusions. Ask us to review your actual policy before making a decision.