What Is Professional Liability Insurance? A Guide for NJ & PA Businesses
General liability insurance is an important part of many business insurance programs—but it doesn't cover every type of lawsuit a business might face.
If your business provides professional advice, services, or expertise, you may also need professional liability insurance, sometimes called errors and omissions (E&O) insurance.
What Does Professional Liability Insurance Cover?
Professional liability insurance is designed to address certain claims alleging that your professional services, advice, or work caused a client financial loss.
For example, a client could claim that:
You made an error in your work
Your professional advice caused them financial harm
You failed to deliver a promised service
Your work contained an error or omission
A deadline or contractual obligation was missed
Coverage depends on the specific policy, so it's important to understand what your insurance actually covers.
Who Needs Professional Liability Insurance?
Professional liability can be particularly important for businesses that provide specialized knowledge or professional services.
This may include:
Consultants
Accountants
Attorneys
Architects and engineers
Technology companies
Marketing professionals
Designers
Real estate professionals
Other service-based businesses
Even when you do excellent work, a client can still make an allegation against your business.
General Liability vs. Professional Liability
These two coverages protect against different types of risks.
General liability generally addresses certain bodily injury, property damage, and personal and advertising injury claims.
Professional liability is designed around certain claims arising from professional services or advice.
A business may need both.
Does Your Business Need Professional Liability Insurance?
If clients rely on your expertise or professional services, it's worth discussing professional liability coverage with an experienced insurance agent.
At Barry Paul Rose Insurance Agency, we help businesses throughout New Jersey and Pennsylvania evaluate their commercial insurance needs and find coverage appropriate for their operations.
Not sure if professional liability insurance is right for your business? Contact us for a coverage review.
