Professional Liability Policies

Professional Liability coverage is a critical protection for a wide variety of professionals from insurance agents to contractors. Sometimes referred to as Errors and Omissions, or Completed Operations coverage, this policy is specifically designed to cover you for negligent acts, errors, omissions, mistakes, misstatements, or misleading acts.

While each industry is different, a professional liability policy is critical for anyone who is not directly employed by a larger company. Examples would be small business owners, anyone who is a 1099 independent contractor, and franchise owners, as well as anyone who doesn’t fit into those categories but does some work “on the side” for direct payment. It’s equally as critical for someone who produces something tangible like a contractor, an app designer, or someone who writes code–as it is for consultants, insurance agents, or investment professionals who give professional advice. Either a tangible product or the advice of a trusted professional can ultimately fail to work as advertised and when it does, the individual who made the product or gave the advice has a risk exposure from liability claims against them.

The professional liability policy is flexible and designed for each industry to address the specific risks that the industry exposes you to, and it’s priced to correspond with the likelihood of a claim as well as the size of claims that are paid. They may be available on a claims made or occurrence form, which just means that you can obtain coverage that either just covers claims made while the policy is in force or for whenever the claim is made provided that the incident happened while the policy was in force. Because of the fact that claims aren’t always filed immediately the Occurrence Form is usually what is recommended.

Deductibles range from $0 to $5,000 per claim made, which is another great way to help manage the cost up or down depending on your situation.

Premiums for these policies vary significantly, but generally speaking, someone who gives professional advice can typically obtain coverage for around $400-$500 a year. Those who are producing a tangible product can typically expect between $600 and $900 a year depending on their industry and product.

We all work hard and do the best that we can to provide outstanding service to our customers and clients, but mistakes happen and the costs related to those mistakes can sometimes be overwhelming. Professional Liability ensures that those costs aren’t going to put you out of business.


This post was written by Aaron Nicklay, Agent with Farmer’s Insurance. If you would like more information on Professional Liability Policies or how Aaron can help protect you against pricey mistakes, contact him at or (952) 229-5155.

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