General liability covers bodily injury and property damage. But many claims against service businesses involve neither — a missed deadline, an error in a report, a recommendation that did not work out. That is the job of professional liability, also called errors and omissions (E&O) or miscellaneous professional liability (MPL).
Even an allegation with no merit can cost thousands to defend. For consultants, agencies, designers, and other advice-based businesses, E&O is often required by client contracts.
What Professional Liability / E&O typically covers
- Negligence and errors. Claims that you made a mistake or failed to meet the standard of care for your profession.
- Omissions. Claims that you failed to do something you should have done — missed a step, deadline, or disclosure.
- Misrepresentation. Allegations that your advice or representations were inaccurate or misleading.
- Defense costs. Attorney fees and court costs, which can be significant even when the claim is dropped.
- Settlements and judgments. Covered amounts you are legally obligated to pay, up to your limits.
A marketing agency launches a client’s campaign a week late, and the client claims it lost $40,000 in seasonal sales. The client sues for breach of professional duty. Professional liability pays for the agency’s defense and a negotiated settlement.
Businesses that commonly carry Professional Liability / E&O
- Consultants, coaches, and business advisors
- Marketing, creative, and design agencies
- IT, software, and technology service firms
- Bookkeepers, tax preparers, and administrative services
- Property managers and real estate-related services (with the right form)
- Any business whose contracts require E&O
What it usually does not cover
- Bodily injury and property damage. Those claims belong on general liability.
- Intentional, fraudulent, or criminal acts. Dishonest acts are excluded, though defense may be provided until proven.
- Fines and penalties. Government fines and penalties are generally not insurable.
- Guarantees and contractual promises. Promising a specific result can create liability beyond what the policy covers.
- Known prior incidents. Claims from situations you knew about before the policy started are excluded.
- Licensed professions with dedicated programs. Doctors, lawyers, architects, and similar professions usually need specialized malpractice forms.
Independent means we compare — not just quote one company
Professional liability markets we can shop include Coterie and Thimble, plus specialty markets for classes they do not write. Eligibility depends on your profession, revenue, and state.
Tips before you buy
- Most E&O is claims-made: the policy in force when the claim is made responds — not the one in force when the work was done.
- Protect your retroactive date when you switch carriers so past work stays covered.
- If you close or retire, ask about an extended reporting period (tail).
- Use written contracts with clear scopes; they reduce claims and help your defense.
Coverage that pairs with Professional Liability / E&O
General Liability
Third-party injury, property damage, and advertising injury claims — plus defense costs.
Learn moreCyber Liability
Breach response, ransomware, business interruption, and privacy liability.
Learn moreBusiness Owners Policy (BOP)
Liability + property + business income in one package for eligible small businesses.
Learn moreCommercial Umbrella
Extra liability limits above your GL, auto, and employers liability policies.
Learn morePopular with: Professional & Medical Offices · Real Estate & Property Owners · All commercial coverage
Professional Liability / E&O questions
Is professional liability the same as general liability?
No. General liability covers bodily injury and property damage to others. Professional liability covers financial loss caused by your professional services or advice. Many service businesses need both.
What does claims-made mean?
A claims-made policy covers claims first made while the policy is active, for work done after your retroactive date. Keeping continuous coverage and the same retro date matters.
Do I need E&O if I have a contract with a limitation of liability?
Contracts help, but they do not stop a client from suing you. E&O pays for your defense either way.
How much coverage should I carry?
Many small firms start at $1 million per claim. Client contracts often set the minimum. We can quote several limits so you can compare.
Does professional liability cover a data breach?
Usually not fully. Data breaches and ransomware are better handled by cyber liability, which can be paired with E&O.
We cover your assets
Let’s build the right commercial program
Tell us about your business once. We shop multiple carriers, explain the trade-offs in plain English, and handle certificates, audits, and renewals after you bind.
Educational only — not a policy, quote, or coverage guarantee. Coverage, eligibility, and carrier availability vary by state, class of business, and underwriting. Policy language controls. Talk with a licensed Asshield agent about your situation.