If you own your own business, you may be wondering whether you need professional liability insurance. The answer varies depending on your line of work.

Professional liability insurance (also known as E&O insurance or medical malpractice insurance) provides coverage for business owners that offer advice or professional services in the event that you give bad advice or fail to perform a service resulting in a client’s lost revenues. Professionals such as accountants, lawyers, physicians, and real estate agents would be required to carry this type of insurance policy as it protects you from your most common causes of loss.

It’s important to note that a professional liability insurance policy is a special type of coverage that is not included under general liability. If you currently have a general liability policy, the additional coverages afforded under professional liability insurance would need to be purchased separately. 

Professional liability is often written on a claims-made basis; this means that your professional liability policy will only respond if the claim is made during the policy period for a loss occurring within the coverage period. So, if you have been doing business for a period of time, or you are transferring from one insurance company to another, you will want to make sure that the “retroactive date” on your new policy extends back to when you started the business. Furthermore, even if you are selling your business or moving on from the existing business for any reason, you will want to buy a “tail” on the insurance. Ideally, this will cover you during the statute of limitations period within your industry. 

Professional Liability Insurance Examples: 

  • You build a website for your client in West Chester, PA. Glitches in the site cause it to shut down for several days, resulting in lost revenue to your client. You can be held responsible for this lost revenue.
  • An architect draws blueprints for a building being constructed in Exton. Several months after the building is built, the roof caves in. The design of the custom roof turns out to be a poor one, leaving the architect liable.
  • While working on customer computers in Kennett Square, you forget to re-install the firewall, allowing a virus to access customer files which include personal information.

Risk Averse Insurance has been insuring Delco and the surrounding areas since 2015, providing expert service while offering affordable prices on workers’ compensation insurance. We want to partner with your small business and ensure that you’re getting the best possible coverage.


Call Risk Averse Insurance in Media, PA to discuss professional liability insurance for your small business.

Risk Averse Insurance is an independent insurance agency in Delaware County that specializes in providing high-quality insurance products at an affordable price.

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