Question 1

What is professional liability insurance (E&O)?

Accepted Answer

Professional liability insurance, also called Errors & Omissions (E&O), protects your business against claims that your professional services or advice caused financial harm to a client. Unlike general liability (which covers physical injury), E&O covers economic losses from mistakes, missed deadlines, negligent advice, or failure to deliver promised results.

Question 2

Do consultants need professional liability insurance?

Accepted Answer

Yes, consultants should carry professional liability (E&O) insurance. Even if you provide excellent work, a client can allege that your advice caused them financial harm. Many client contracts require consultants to carry minimum E&O limits. The cost is relatively low — typically $1,000–$3,000/year for a solo consultant — and it protects your personal assets.

Question 3

What's the difference between general liability and professional liability?

Accepted Answer

General liability covers bodily injury and property damage (someone slips in your office, your product damages property). Professional liability (E&O) covers financial losses from your professional services (bad advice, missed deadlines, errors in deliverables). Most professional service firms need both — GL for physical risks and E&O for service-related claims.

Professional Services Insurance

Frequently Asked Questions

What is professional liability insurance (E&O)?

Do consultants need professional liability insurance?

What's the difference between general liability and professional liability?