Professional Liability Insurance

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What is professional liability insurance?

Simply put, professional liability insurance covers mistakes in your work.

Mistakes happen. But some mistakes—the kind that result in financial loss for your customers—can lead to claims of negligence, legal defense fees, and court dates. All of those things get in the way of your success while building your business.

So for claims involving professional errors and negligence, you need professional liability insurance. You may hear of this referred to as errors & omissions (E&O) or professional indemnity insurance, but it’s all the same thing (you know how insurance goes).

What does professional liability cover?

Even the most dedicated professionals can make mistakes or worse, the client alleges you made a mistake. That’s where professional liability comes in.

Professional liability covers claims of errors and negligence related to your professional services. While general liability covers you in the event of third-party physical injury or property damage, professional liability insurance coverage protects you if a client claims your negligence because a professional mistake resulted in financial loss.

Professional liability provides the investigation and defense for claims for damages that arise out of your providing or failing to professional services. Examples of what your policy provides:

Cost of Investigating the Actual or Alleged Negligence

The insurer does the legwork in determining what happened when a customer claims that you (or members of your crew) were negligent in completing your work, such as missing a deadline or not acting professionally.


The insurer defends you in legal proceedings related to claims that you didn’t follow through on a portion of your deliverable/service, be it the word count on an article or the file format on a wedding video.

False or Frivolous Claims for Damages

Along with helping to cover the costs of valid claims, the policy will defend you against claims that have no merit.

Who needs professional liability insurance?​

In a nutshell, professional liability is insurance for ‘experts.’ If your clients rely on you for professional advice or specific knowledge, from photo editing to notarizing documents, they can also claim that a mistake in your work resulted in a financial loss on their part. For most businesses. professional liability is optional. However, a few professions in the medical, government, and legal fields require professional liability insurance in order to secure a license. Other types of businesses that commonly need professional liability coverage include:

  • IT Consultants
  • Finance & Accounting
  • Architecture & Design
  • Management Consulting
  • Engineering

The reality? Anyone whose clients rely on them for specific knowledge, from event planning to tutors, can benefit from E&O coverage.

Learn more about professional liability in a Q&A with our CIO. Check it out.

Why is professional liability insurance important?

If you provide expert services, professional liability can help protect against the financial consequences of claims of negligence or mistakes arising out of your professional services. In some cases, a contract, professional affiliation, or state law may require businesses to carry professional liability coverage.

Even if not required, professional liability coverage helps protect your business against the risk of doing business for others. Furthermore, it shows prospective clients that you are a legitimate business. We all know mistakes happen and in some cases, no matter what you do, you can’t meet the client’s standards. With E&O insurance you can focus on growing and running your business instead of worrying about potential claims.

“Professional liability is essential for a complete risk management package, protecting your business and assets, whether you are actually responsible, or someone just claims you are.”

The content on this page has been verified by
Terri Hitchcock, JD
Chief Insurance Officer, Thimble
Terri has 38 years of industry experience and knows a thing or two about insurance, so she reviewed and approved everything on this page.

How much does professional liability insurance cost?

The cost of professional liability (or E&O coverage) will vary based on a few factors—mainly what you do and where you work. Your industry determines how much you’re exposed to risk, as some jobs come with a higher likelihood of professional liability, and if you live in a metropolitan area, you’ll likely pay a little more to get insured.

On average, small business owners typically pay around $45/month or $500 per year for errors and omissions insurance.1 As with any insurance policy, the cost varies based on your specific business’s details, but policies arranged by Thimble start at $36 a month.

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What other kinds of business insurance do I need?

While professional liability insurance is designed to protect your business from risks associated with negligence, there are a number of other types of business insurance to consider as well.

General Liability Insurance

Protects policyholders against risks like accidental bodily injury, property damage, and personal and advertising injury to a third party. General liability insurance is essential for businesses operating across a range of industries.

Equipment Insurance

Protects the equipment you own and use for work, from a lawn mower to a camera. Business Equipment Protection is a type of property insurance that covers your stuff.

Business Owner’s Policy (BOP)

Designed for small business owners who need a few types of coverage. BOP is usually a bundle that includes coverage for damage to owned property, general liability, and business interruption insurance.

Workers’ compensation

Essential if your business has employees or workers of any kind. Workers’ comp coverage applies to medical expenses and lost wages associated with work-related injuries and illnesses.

Malpractice Insurance

A type of professional liability insurance specifically designed for health care professionals and attorneys. If you work in either industry, you may need malpractice insurance to cover the specific risks of your profession.

Learn more about small business insurance

Professional Liability FAQ

Is professional liability insurance required by law?

Professional liability insurance is legally required for some professions and roles, specifically in the medical and legal industries.2 However, even if it’s not legally required, your clients may contractually require you to have a professional liability insurance policy. Make sure you understand the terms of your contract.

Professions required to carry E&O insurance:

Medical professionals must carry medical malpractice insurance, an industry-specific type of professional liability coverage. This applies to doctors, nurses, rehabilitation professionals, physician’s assistants, and other employees in allied health care settings.

Lawyers are often required to carry professional liability coverage, or at least inform their clients if they are practicing without insurance.

Government contractors may be required to carry professional liability insurance.3

Some professionals are required to carry professional liability insurance in order to be licensed or to perform certain functions in certain jurisdictions

Where is professional liability available with Thimble?

Professional liability insurance is currently available with Thimble in almost all states except for Washington, New York, Colorado, Illinois, and Massachusetts. Stay tuned for those five states – we’re working on launching professional liability for you soon!

Can I get my professional liability and general liability under one policy?

Yes! Policies with Thimble include both general liability and professional liability coverage in one simple, affordable package to give you a wider safety net when working with clients.

How do I show proof I have a professional liability policy?

Once you have general liability coverage, you’ll receive an email with your policy details and any necessary Certificates of Insurance (COI) you might require. Your COI, also referred to as an ACORD 25, Certificate of Liability Insurance, is a standard document that proves your business is insured. A COI includes details like the types of liability coverage (general liability, professional liability, etc.) you have in force, the applicable policy limits, and the duration of your policy. This is typically the document you need to show your clients to prove that you’re ready to get to work. With Thimble, you’ve got instant access to your COI after purchase and can make and send unlimited copies all with a click of a button.

How are professional liability claims handled?

Claims are handled on behalf of Markel Insurance Company or National Specialty Insurance Company. If you need to file a claim, please follow the contact instructions listed on your policy. Read more here.

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