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Professional Liability Insurance
Help protect your livelihood when a client claims your advice or professional work caused a financial loss.
- In short
- Professional liability answers claims that your work caused a client financial harm, and on a claims-made form the dates matter as much as the facts.
- Who or what is protected
- Your business and practice against covered allegations about your professional services.
- Where it stops
- Financial harm from services, not bodily injury or property damage.
When the work itself is questioned
This guide helps you read a claims-made policy’s dates and know why switching insurers or closing a practice needs care.
Policy background and wording
Professional liability insurance, often called errors and omissions (E&O), helps respond when a client alleges that your professional services, advice, or work were negligent, contained errors, or failed to deliver as promised, resulting in financial loss.
Unlike general liability, which focuses on physical injury and property damage, professional liability addresses the economic harm that can flow from professional mistakes. These policies are commonly written on a claims-made basis, so timing and continuous coverage matter.
Timing can change the answer
Claims-made and reporting requirements, retroactive dates, and extended reporting options matter when changing insurers or closing a practice.
Who typically looks at it
- Consultants and agencies
- Technology and software providers
- Accountants, financial professionals, and advisors
- Healthcare and allied-health providers
- Architects, engineers, and design firms
How it works
How claims-made timing works
Work must be after the retroactive date, and the claim must be made and reported while a policy is active.
Read the diagram as text
In order:
- Retroactive date
- Work performed
- Current policy begins
- Claim made and reported
- Policy ends
- Covered work window: on or after the retroactive date
- Claim must be made and reported here
- Extended reporting, if purchased, can lengthen the reporting window after the policy ends.
Terms on this page
- Claims-made
- Covers claims made and reported while the policy is active, subject to the retroactive date.
- Retroactive date
- How far back covered work can reach. Earlier work is generally not covered.
- Extended reporting
- An option that matters when changing insurers or closing a practice.
Look deeper
What happens if I switch insurers?
Timing and continuous coverage matter. A gap can leave earlier work uncovered.
What to check: Confirm the new policy keeps your existing retroactive date.
Are claims I already knew about covered?
Claims known before the policy began are excluded.
What to check: Disclose known incidents on the application.
Which leadership or service claim is this?
Three policies address claims about how a business operates. The allegation decides the starting point.
| Professional liability | General liability | D&O | |
|---|---|---|---|
| Alleged harm | Financial loss from services or advice | Bodily injury or property damage | Harm from management or governance decisions |
| Usual claimant | A client | A visitor, customer, or neighbour | Investors, regulators, employees, others |
| Example | A missed filing deadline | A visitor injury | Alleged misrepresentation to investors |
Scroll sideways to compare all columns.
What it may cover, and where it stops
Exact terms depend on the carrier, policy form, endorsements, and applicable law. Review the wording with your agent.
May cover
- Claims of professional negligence, errors, or omissions
- Failure to deliver promised professional services
- Defense costs for covered claims, subject to policy terms
- Certain claims arising from work performed before the claim, within the policy period
- Settlements or judgments up to selected limits
Commonly excluded or limited
- Bodily injury and property damage, which general liability addresses
- Intentional, fraudulent, or criminal acts
- Claims known before the policy began
- Employment-related disputes, which EPLI addresses
- Cyber incidents, which cyber liability addresses
Working through an example
Hypothetical and for illustration. Whether a real loss is covered depends on the facts and the policy.
- What happens
Missed deadline causes loss
A consultant misses a critical filing deadline and the client alleges financial harm.
- Which part is relevant
The allegation is a professional error causing economic loss, which is what E&O addresses.
- What could change the outcome
- The work must be on or after the retroactive date.
- The claim must be made and reported during the policy period.
- Intentional or fraudulent acts are excluded.
Other situations
Software error
A client says a software provider's error disrupted operations and caused losses. The policy may help address the negligence allegation, subject to terms and exclusions.
Design oversight
A design firm is accused of an oversight that required costly rework. E&O coverage may help respond to the resulting professional-liability claim.
Before you talk to an agent
What underwriters usually weigh
- Profession and the complexity of your services
- Annual revenue and client contract sizes
- Claims history and risk-management practices
- Selected limits, deductibles, and retroactive date
- Whether coverage is claims-made and continuously maintained
Other questions owners ask
What does claims-made mean?
Claims-made policies generally cover claims that are both made and reported while the policy is active, subject to the retroactive date. Maintaining continuous coverage helps avoid gaps.
What is a retroactive date?
The retroactive date sets how far back covered work can reach. Work performed before that date is generally not covered, which is why continuous coverage matters.
Talk through professional liability insurance with an agent
We compare carriers, explain the wording, and help you choose limits that fit how your business actually runs.
