If you offer any kind of professional service or advice, you’re taking on risks that certain types of business insurance just don’t cover. Even when you’re great at what you do, a client can still claim you made a mistake or didn’t deliver what you promised. That’s where professional liability insurance comes in. In this article, find out who needs professional liability insurance and how it can help safeguard your finances, reputation, and career.
Professional liability insurance protects professionals and businesses against claims that allege harm due to:
Professional liability insurance is also called errors and omissions (E&O) insurance, especially in fields like tech, consulting, real estate, and marketing. No matter what you call it, this liability insurance focuses on financial losses tied to a mistake or oversight made in delivering your services — not physical injuries or property damage claims made by third parties (like customers and visitors), which are covered by general liability insurance.
In medical and dental fields, professional liability insurance is known as malpractice insurance, which protects against claims related to patient care. While malpractice insurance is specific to healthcare, the core purpose is the same: protecting professionals when clients or patients allege physical harm due to professional services.
Any professional who provides services, advice, or consulting should consider professional liability insurance. If a mistake — or even the perception of one — could lead to a client’s financial loss (think: miscalculated financial targets; mistake on printed advertising ) or a patient’s bodily injury (think: misdiagnosis of a medical condition) there could be legal action.
Think of it this way: if you like to know what to do during a worst-case scenario , you’ll want to have professional liability insurance. This way, if a claim comes in, you’ll have a plan — and a team of legal professionals to help you, and you likely won’t have to spend a dime.
Below are some of the businesses and fields most likely to need insurance for professional liability, along with examples of how liability risks can arise.
Accountants, bookkeepers, financial planners, and tax preparers handle sensitive financial information. Errors can lead to significant monetary loss for clients.
Example: A client claims an overlooked tax deduction resulted in penalties.
Agents, brokers, and other real estate professionals regularly advise clients on high-value transactions. Miscommunication or incomplete disclosures can spark disputes.
Example: A buyer claims they weren’t informed about zoning restrictions before they bought their house. Now they regret their purchase, plan to sell, and sue you for the cost of relisting and the decrease in home value.
Management consultants, HR advisors, business coaches, and other types of business consultants provide guidance that influences major decisions. If results don’t meet expectations, clients may point to your advice.
Example: A company claims your recommendations led to decreased revenue.
Creative professionals such as designers and marketers and tech professionals such as web developers and IT consultants often work under tight deadlines and complex scopes. Clients may claim a project didn’t meet expectations or caused financial loss.
Example: A website launch delay leads to lost sales for a client.
Nurses, nurse practitioners, dentists, mental health professionals, physical therapists, and other healthcare providers face high stakes. A patient could claim improper treatment, miscommunication, or failure to follow protocols. Even if the claim is unfounded, defending yourself can be costly.
Example: A patient alleges that unclear discharge instructions led to complications, which led to more medical expenses.
Insurance professionals are responsible for guiding clients through complex policy requirements and coverages. Miscommunication or paperwork errors can translate into major financial losses.
Example: A client alleges you misrepresented the terms of their policy.
Freelancers often work without the safety net of employer coverage. One unhappy client can create a costly legal situation.
Example: A freelance writer is accused of missing key deliverables that impacted a marketing campaign and led to lost revenue.
These professionals create plans and specifications that must meet strict standards. A design flaw — even if minor — can cause costly project delays.
Example: A building contractor claims that an engineering miscalculation caused structural issues that led to expensive fixes.
Professional liability insurance isn’t legally required in many industries, but there are important exceptions — especially in healthcare and dental fields, where coverage is often mandated by state law or licensing boards.
Even when the law doesn’t require proof of insurance, many clients, employers, and contracts do before they’ll work with you. And regardless of requirements, having professional liability coverage is one of the most effective ways to protect your financial stability and professional reputation.
When selecting a policy, consider:
Avoid common mistakes like underinsuring, assuming employer coverage is enough, or overlooking contract requirements. And if you’re new to the insurance market, a Berxi product specialist can walk and talk you through all of these frequently asked questions — and more.
Berxi makes it easy to get the right coverage at a fair price. Berxi’s policies are designed for small businesses and professionals like you — simple to understand, easy to buy, and backed by the A++ rated financial strength of Berkshire Hathaway Specialty Insurance Company.
Whether you need errors and omissions coverage or a malpractice policy, Berxi has you covered for all your professional liability insurance needs. Get a free professional liability insurance quote in minutes.
Yes. An LLC protects your personal assets from business debts, but it doesn’t shield you from claims related to your professional services.
Malpractice insurance is a type of professional liability insurance specific to healthcare providers.
Most professionals pay a few hundred dollars per year. But the costs vary by profession, risk level, coverage limits, and other factors. Learn more about professional liability insurance costs or get a quote and see how much you can expect to pay.
Absolutely. Professional liability insurance is available for full-time, part-time, and self-employed professionals. When filling out your quote form, you would just indicate how many hours you work per week, so your insurance company knows and can adjust your policy’s rate (fewer hours typically mean less risk).
Even if the claim is completely unfounded, you would be responsible for all legal fees, settlements, and judgments. The legal back- and- forth can cost thousands of dollars even before a settlement is negotiated or the claim goes to court.
Buy professional liability insurance before you begin offering services or signing client contracts. Coverage must be active when an alleged incident occurs. The good news is that policies at Berxi are bought directly from us, not through a broker, and can go into effect within 24 hours.
Image courtesy of iStock.com/shapecharge
Image courtesy of iStock.com/GaudiLab
Image courtesy of iStock.com/andresr
Image courtesy of iStock.com/Jacob Wackerhausen
More:
The views expressed in this article are those of the author and do not necessarily reflect those of Berxi™ or Berkshire Hathaway Specialty Insurance Company. This article (subject to change without notice) is for informational purposes only, and does not constitute professional advice. Click here to read our full disclaimer
The product descriptions provided here are only brief summaries and may be changed without notice. The full coverage terms and details, including limitations and exclusions, are contained in the insurance policy. If you have questions about coverage available under our plans, please review the policy or contact us at 833-242-3794 or support@berxi.com. “20% savings” is based on industry pricing averages.
Berxi™ is a part of Berkshire Hathaway Specialty Insurance (BHSI). Insurance products are distributed through Berkshire Hathaway Global Insurance Services, California License # 0K09397. BHSI is part of Berkshire Hathaway’s National Indemnity group of insurance companies, consisting of National Indemnity and its affiliates, which hold financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s. The rating scales can be found at www.ambest.com and www.standardandpoors.com, respectively.
No warranty, guarantee, or representation, either expressed or implied, is made as to the correctness, accuracy, completeness, adequacy, or sufficiency of any representation or information. Any opinions expressed herein are subject to change without notice.
The information on this web site is not intended or implied to be a substitute for professional medical advice, diagnosis or treatment, and does not purport to establish a standard of care under any circumstances. All content, including text, graphics, images and information, contained on or available through this web site is for general information purposes only based upon the information available at the time of presentation, and does not constitute medical, legal, regulatory, compliance, financial, professional, or any other advice.
BHSI makes no representation and assumes no responsibility or liability for the accuracy of information contained on or available through this web site, and such information is subject to change without notice. You are encouraged to consider and confirm any information obtained from or through this web site with other sources, and review all information regarding any medical condition or treatment with your physician or medical care provider. NEVER DISREGARD PROFESSIONAL MEDICAL ADVICE OR DELAY SEEKING MEDICAL TREATMENT BECAUSE OF SOMETHING THAT YOU HAVE READ ON OR ACCESSED THROUGH THIS WEB SITE.
BHSI is not a medical organization, and does not recommend, endorse or make any representation about the efficacy, appropriateness or suitability of any specific tests, products, procedures, treatments, services, opinions, health care providers or other information contained on or available through this web site. BHSI IS NOT RESPONSIBLE FOR, AND EXPRESSLY DISCLAIMS ALL LIABILITY FOR, ANY ADVICE, COURSE OF TREATMENT, DIAGNOSIS OR ANY OTHER SERVICES OR PRODUCTS THAT YOU OBTAIN AFTER REVIEWING THIS WEB SITE.
Click to collapse disclamerWant Berxi articles delivered straight to your inbox? Sign up for our monthly newsletter below!
"*" indicates required fields
Amy Beardsley Mar 27, 2026
Berxi Editorial Team Mar 25, 2025
Want Berxi articles delivered straight to your inbox? Sign up for our monthly newsletter below!
