What does professional liability insurance cover?

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Professional liability insurance provides indemnity—or protection—to your business if you’re accused of making professional errors or omissions that result in financial loss for your customers.

If part of your job involves consulting other businesses or people, you need professional liability insurance, also known as errors and omissions insurance. No matter what your policy is called, the core function is protection from the risks you take on when working with clients and giving your expert advice.

What does professional liability cover?

Professional liability covers you if your client alleges you made a mistake that lost them money, even if it turns out you’re not guilty. While general liability insurance covers you in the event of third-party bodily injury or property damage, professional liability insurance protects you if providing, or failing to provide, your professional services results in third-party financial loss. Your policy can provide coverage for these key things:

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. 

Defense of Claims

The insurer defends you in legal proceedings related to claims that you didn’t follow through on a portion of your deliverable or 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 pros. If your clients rely on you for professional consultation or specific knowledge, from event planning to notarizing documents, they can also claim that negligence in those services resulted in a financial loss on their part.

For many businesses. professional liability is optional, but some 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:

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 Insurance FAQs

Where is professional liability coverage via Thimble available?

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

What if I only need professional liability coverage part of the year?

Not a problem! With Thimble, you only pay for insurance when you need it. So whether you’re just starting out as a marketing consultant and only have a few clients or only work certain during certain periods, Thimble has a business insurance policy to fit your needs! 

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.

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