How much does professional liability cost?

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How much is professional liability insurance?

Small business owners pay $45 per month or $500 per year on average for professional liability insurance.¹

Also known as errors and omissions insurance, professional liability insurance varies in price by industry and the length of coverage. At the simplest level, industries with a higher risk of expensive errors and omissions pay more, while low-risk industries pay less. We’ll dive into the average costs by industry below, but first let’s look at the general costs of professional liability coverage.

Typically, professional liability coverage is purchased on an annual basis with a monthly premium. It’s almost always sold along with general liability insurance, because they’re described as “interlocking coverages” that blanket the most common risks posed to any small business. Thimble provides the flexibility that allows you to purchase professional liability coverage when you need it, from a month up to a year and even down to an hour, starting at $36 per month for both general and professional liability.

Factors that influence professional liability cost

Every profession has its own unique risks. When it comes to professional liability coverage, your price (also known as your “premium”) is typically determined by the following factors:

Location

The location of your business can impact professional liability insurance costs. Some states may mandate higher coverage limits in order to maintain a professional license, which would increase the overall cost.

Crew

The size of your business can impact insurance costs in two ways. More employees typically translates into higher premiums. The more staff you have, the more employees that need to be covered for providing their expert services or advice.  

Coverage Limits

How much coverage you want impacts how much professional liability insurance costs. With Thimble, you can select a liability coverage limit of either $1 million or $2 million. And although it’s double the coverage, the premium on a $2 million coverage limit is typically only incrementally higher.

Industry

Some professions inherently come with more risk, such as lawyers and people in the medical field. The increased risk of these professions is reflected in the premium.

How much does professional liability insurance cost by industry?

For example, the professional liabilities of certain consultants tend to be far more costly than those made by a hair stylist. As a result, the premiums are usually higher for more risky professions. Using Thimble data, the average monthly professional liability insurance premiums are as follows:

DJs

Pet services

Beauty professionals

Fitness professionals

Event professionals

Photographers

Consultants + Freelancers

$8

$23

$30

$36

$35

$38

$40

$8

DJs

$23

Pet services

$30

Beauty professionals

$36

Fitness professionals

$35

Event professionals

$38

Photographers

$40

Consultants + Freelancers

Why do I need professional liability insurance?

Because claims are expensive.

Based on the most recent data from the Insurance Information Institute, the average amount awarded for professional liability lawsuits exceeded $180,000.²

Amazingly, though, the average cost to even defend those claims in the first place ranged from $100,000 to $500,000.³ As a small business owner, paying less than $50 a month is almost always worth protecting your business when you compare to paying over $100,000.

We believe you should be able to get protected and work with confidence no matter what you do, so whether you need a policy by the month or by the hour, Thimble’s got you covered.

 

What other kinds of business insurance do I need?

While professional liability insurance is designed to protect your business from risks associated with negligence, the total picture of your assets includes a few other essential types of insurance.

General Liability Insurance

Protects your business against claims of third-party bodily injury, property damage, and personal and advertising injury.

Learn more
Workers' Compensation

Protects your business if you have employees or workers of any kind. This coverage applies to medical expenses and lost wages associated with work-related injuries and illnesses.

Learn more
Business Equipment Protection

Protects the equipment you own and use for work, from a lawn mower to a camera. Also known as inland marine insurance, this is a type of property insurance that covers your stuff.

Learn more
Business Owner's Policy (BOP)

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

Learn more

Professional Liability Cost FAQs

Can I purchase professional liability insurance and general liability insurance together?

While this depends on the insurance carrier, there are some who bundle the two types of coverage together. 

At Thimble, our goal is to simplify business insurance. So, if your profession needs professional liability coverage and general liability coverage, we’ve included both in a simple bundle. For example, the median cost of Photographer Insurance (a bundle of professional and general liability insurance) is $57 a month! Together these “interlocking coverages” work together to account for the most common risks inherent in any small business.

How do I get a quote for professional liability insurance?

With Thimble you can get a quote in less than 60 seconds. Just answer a few quick questions: your ZIP code, industry, claim history, and coverage limit and length. Currently all professional liability coverages that Thimble offers come bundled with general liability.

How do I file a professional liability claim?

If you need to file a claim, please follow the contact instructions listed on your policy. Read more here.

¹ https://fitsmallbusiness.com/professional-liability-insurance-cost/

²  Insurance Information Institute. “Median And Average Personal Injury Jury Awards By Type Of Liability, 2018” https://www.iii.org/graph-archive/96044

³  Insurance Journal. “Lawyers Professional Liability Insurance Claims Grow in Severity, Complexity, Cost.” https://www.insurancejournal.com/news/national/2019/05/31/527978.htm

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