Professional Liability Insurance Cost

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Professional liability insurance offers coverage to individuals and businesses who charge a fee for a service.
When customers come to you for your professional expertise and you make a mistake, you are leaving yourself open to significant legal and financial repercussions if you do not have the proper insurance policy. To ensure you are protected, it is important to understand what type of policy you need and what type of coverage it offers.

Read on to learn more about the cost of professional liability insurance and whether or not it is right for your business.

We Cover in This Guide

  • How much does professional liability insurance cost?
  • What is a professional liability insurance policy?
  • What does professional liability insurance cover?
  • When do you need professional liability insurance?
  • Other types of insurance your business may need
  • Tips for buying
  • FAQ
  • Summary

How Much Does Professional Liability Insurance Cost?

The cost of professional liability insurance can vary significantly depending on factors such as the size of your business, your industry, the type of coverage you require, and more. For smaller businesses, the average cost of professional liability insurance falls between $1,000 and $3,000 annually, per million dollars in coverage.

What Is a Professional Liability Insurance Policy?

Professional liability insurance covers claims of a loss made against you and your business. If a client or customer determines that your expertise has proven to be less than satisfactory, they may try to take legal action against you.
Depending on the industry your business is in, you may see this referred to by different names. For example, for doctors and nurses, it is called “medical malpractice insurance,” “errors and omissions” for real estate agents and appraisers, and “technology errors and omissions” for software programmers.

What Does Professional Liability Insurance Cover?

Professional liability insurance can cover your legal expenses, including the cost of hiring a lawyer, when a customer sues due to a mistake made by you or your business.

Professional liability insurance cover things like:

  • Mistakes and oversights
  • Unsatisfactory advice, products, or services
  • Negligence
  • Missed deadlines
  • Services that were paid for but not performed
  • And more

Professional liability insurance does not typically cover things like:

  • Employee discrimination lawsuits
  • Damaged business property
  • Employee injuries
  • Property damage
  • Customer injuries
  • Business vehicles

It is important to carefully review your policy to understand what is and is not covered and what supplemental insurance policies you may need to take out.

Professional liability coverage

When Do You Need Professional Liability Insurance?

As owning a business inherently includes the existence of risk, nearly all business owners should consider taking out a professional liability insurance policy.
While you may already have general liability coverage, these policies nearly always exclude coverage for claims arising out of a professional service.

With that in mind, professional liability insurance will come in handy if you:

  • Want protection against negligence claims
  • Want protection against financial risk
  • Want to ensure your business assets are protected
  • Want protection against anything that can go wrong when providing professional expertise, services, or products to customers

If any of the above apply to you, it may be time to start shopping for policies.

Other Types of Insurance Your Business May Need

Professional liability coverage is a great way to ensure you and your business are protected against claims made against you due to dissatisfaction with a professional service. Below are common types of professional liability insurance policies that are designed for businesses that operate in specific industries.

Architects/Engineers Liability: Coverage for architectural and engineering firms in the event that a customer makes claims of error, omission, or negligence.

Data Compromise Liability: Provides protection for businesses that store sensitive data in the event that the data is compromised and the business is accused of negligence, omission, or error.

Banking & Broker Liability: Offers coverage to bankers and brokers to protect against claims of error, omission, or negligence on behalf of the business.

Technology Liability: Professional liability coverage designed to protect those in the technology industry from claims of error, omission, or negligence.

Media & Communication Liability: Coverage for businesses in the media or communications industries in the event that a customer makes claims of error, omission, or negligence.

Tips for Buying a Professional Liability Insurance Policy

When searching for the right insurance policy it is important to understand what steps you can take to find the provider and policy that best meet your needs.

Keep the following tips in mind when shopping for professional liability coverage:

1. Compare Rates from Multiple Lenders: As the cost of professional liability insurance can vary greatly from lender to lender, it is important to compare quotes from at least three to five lenders to find the best rates available.

2. Know What Policy You Need: There are different types of professional liability policies designed for businesses in different industries. Knowing which type of policy you need will help you save time and money when shopping for lenders

3. Review Coverage: Do not make the mistake of taking out a policy and assuming you are fully protected. Review your policy closely to completely understand what your coverage does and does not include.


How much professional liability insurance do I need?
How much coverage you need depends largely on what type of business you operate, your budget, how much risk you are willing to take on, the size of your business, and other factors.
As each business' needs vary, it is important for policyholders to carefully review their needs and choose their coverage accordingly.

Is professional liability insurance the same as errors and omissions?
Yes, errors and omissions policies and professional liability policies are the same thing and can be used interchangeably.
Depending on your industry, you may see this type of coverage referred to by either term.

Does umbrella insurance cover professional liability?
Umbrella insurance is designed to fill in the gaps and protect you from things your other policies may not cover.
As such, umbrella insurance does not make up for a lack of professional liability coverage, but can offer supplemental coverage and extend beyond the limits of your existing insurance policies.


Professional liability insurance helps protect businesses in a variety of industries from claims made by customers who are dissatisfied with the products, services, or expertise provided to them.

While professional liability insurance costs can vary greatly from lender to lender and business to business, it is typically very affordable and should be considered necessary coverage for most businesses.

Typical cost is


(annually, $1 million basis)

Professional Liability Insurance costs typically $60 a month or ~$700 annually. The costs depend on your profession, location, coverage limits, number of employees and years in business. The typical range is between $500-$1000 annually

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