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What Is Professional Liability Insurance?

Professional liability insurance is commercial insurance designed to address certain claims arising from the performance—or alleged failure to properly perform—professional services.  It is commonly referred to as:

• Professional Liability Insurance
• Errors & Omissions Insurance
• E&O Insurance
• Professional Indemnity Insurance

Texas Department of Insurance describes professional liability insurance as coverage for claims for damages arising from the performance of professional services.   Professional liability coverage is different from general liability insurance.

General liability generally addresses certain third-party bodily injury, property damage, and personal or advertising injury exposures.

Professional liability addresses certain claims arising from professional services, including allegations that a professional's error, omission, negligence, or failure to perform caused financial harm.

A business may need both types of coverage.

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What Does Professional Liability Insurance Cover?

The exact coverage depends on the policy and insurance carrier. However, professional liability insurance may provide coverage for certain claims involving:

• Professional errors
• Professional omissions
• Alleged negligence
• Failure to provide professional services
• Failure to meet professional standards
• Certain financial losses suffered by a client
• Defense of covered claims
• Settlements of covered claims
• Judgments arising from covered claims

 

Texas Department of Insurance notes that professional liability coverage can help with claim settlements, legal fees, and judgments arising from professional services, subject to the policy.

*Example: Professional Error

A consultant provides advice to a client.  The client later claims that the advice was incorrect and caused the client to suffer a financial loss.  If the claim falls within the professional liability policy's coverage, the policy may provide protection subject to the policy terms.

*Example: Failure To Perform

A client hires a professional to provide a specific service.  The client later alleges that the professional failed to provide the service in accordance with the agreed requirements and that the failure resulted in financial damages.  Professional liability insurance may be relevant to such a claim, depending on the policy and circumstances.

*Example: Alleged Negligence

A client alleges that a professional failed to exercise the level of care expected in providing professional services.  The professional may have to defend against the allegation even if the professional believes no mistake was made.  A professional liability policy may provide defense and other covered benefits, subject to the policy.

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Do I Need Professional Liability Insurance If I Already Have General Liability?

You might.  Having general liability insurance does not automatically mean that your business has professional liability coverage.  For example, a consultant could have general liability insurance protecting against certain third-party bodily injury or property damage claims while still having an exposure to a client alleging that incorrect professional advice caused financial loss.

Texas Department of Insurance specifically states that businesses may need professional liability even when they have general liability because the two types of insurance cover different kinds of damages. If your business provides professional advice, recommendations, designs, consulting, technical services, management services, or other specialized professional services, ask whether professional liability coverage should be part of your insurance program.

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Who Needs Professional Liability Insurance?

Professional liability insurance can be appropriate for many businesses and professionals that provide advice, expertise, designs, recommendations, analysis, or other professional services.  Potential examples include:

• Consultants
• Accountants
• Engineers
• Architects
• Real estate professionals
• Real estate inspectors
• Technology consultants
• IT professionals
• Business consultants
• Marketing professionals
• Designers
• Management consultants
• Financial professionals
• Bookkeepers
• Tax professionals
• Home inspectors
• Appraisers
• Certain contractors and specialized trades
• Other professional service businesses

 

The Texas Department of Insurance specifically identifies professions such as childcare providers, electrical contractors, HVAC professionals, engineers, lawyers, and IT consultants as examples of businesses that may need professional liability coverage.  Not every profession has the same insurance requirements, and eligibility varies by insurance company.

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Professional Liability Insurance For Consultants

Consultants often provide recommendations or specialized knowledge that can influence a client's business decisions.  A client could allege that:

• Your advice was incorrect.
• You failed to identify an important issue.
• You made an error in your analysis.
• You failed to complete an assignment.
• Your work caused the client to lose money.
• Your services did not meet contractual expectations.

 

Professional liability insurance may help address certain covered claims arising from professional services.  If you are a consultant, the insurance company may want information about your specific consulting activities, clients, revenue, contracts, and professional experience.

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Professional Liability Insurance For Real Estate Professionals

Real estate professionals can face professional liability exposures in addition to ordinary premises and general liability exposures.  For example, a client could allege that a real estate professional:

• Failed to disclose important information.
• Made an inaccurate representation.
• Provided incorrect advice.
• Failed to meet a professional obligation.
• Made an administrative or transactional error.
• Failed to properly perform a professional service.

 

Professional liability/E&O insurance may be relevant to these types of allegations, subject to the policy.  Because Sams One Stop also provides real estate services, property management support, loan servicing, and other real-estate-related services, we understand that insurance questions can sometimes arise in connection with larger real estate transactions.

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Professional Liability Insurance For IT & Technology Professionals

Technology professionals can face specialized professional liability exposures.  For example:

• Software implementation errors
• Incorrect technical advice
• Failure to complete contracted services
• Project delays
• Configuration mistakes
• Professional negligence
• Client financial losses allegedly caused by professional services

 

IT businesses may also need Cyber Liability Insurance.  These are different risks.  Professional liability generally addresses certain professional-service errors and omissions, while cyber insurance is designed around specific cyber, privacy, data, and technology-related exposures.  A technology business may need both.

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Professional Liability For Accountants, Bookkeepers & Tax Professionals

Accountants, bookkeepers, tax professionals, and similar service providers may face allegations involving:

• Calculation errors
• Reporting errors
• Missed deadlines
• Incorrect advice
• Failure to perform contracted services
• Alleged negligence
• Financial loss caused by professional services

 

Professional liability insurance may provide coverage for qualifying claims, depending on the policy.  Businesses in these professions should also review whether they have other exposures requiring additional insurance.

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Professional Liability for Engineers, Architects & Design Professionals

Design and engineering professionals can face significant professional liability exposures because clients may rely heavily on their expertise and recommendations.  Potential allegations can include:

• Design errors
• Engineering errors
• Failure to meet specifications
• Professional negligence
• Errors in calculations
• Failure to identify a problem
• Financial losses associated with professional services

 

Professional liability coverage for these professions can be highly specialized.  If you are an architect, engineer, surveyor, designer, or another specialized professional, your insurance needs should be evaluated based on your actual services and contractual obligations.

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Professional Liability Insurance For Home-Based Businesses

Operating your business from home does not eliminate professional liability exposure.  In fact, many consultants, technology professionals, accountants, designers, and other professionals operate from home.  Your personal homeowners or renters insurance should not automatically be assumed to provide professional liability coverage.

The NAIC notes that standard homeowners or renters insurance does not include professional liability insurance.  If you operate a professional business from your home, discuss both your business property and professional liability exposures with your insurance professional.

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What Does Professional Liability Insurance Not Typically Cover?

Professional liability insurance is not an all-purpose business insurance policy.  Depending on your business and policy, you may need separate coverage for:

• General liability
• Commercial property
• Commercial auto
• Workers' compensation
• Cyber liability
• Employment practices liability
• Directors and officers liability
• Crime
• Pollution liability
• Product liability
• Umbrella or excess liability
• Other specialized exposures

 

The NAIC identifies professional liability, cyber liability, commercial auto, workers' compensation, crime, and umbrella liability as separate types of business insurance that may be appropriate depending on the business.

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Can a Client Require Professional Liability Insurance?

Yes.  A client, general contractor, government agency, lender, business partner, or other contracting party may require a professional service provider to maintain professional liability insurance and provide evidence of coverage.  Texas Department of Insurance specifically confirms that a person hiring a professional may require the professional to have insurance and provide proof of insurance.  Contract requirements may specify:

• Minimum limits
• Professional liability coverage
• Errors & Omissions coverage
• Retroactive dates
• Additional insured requirements
• Certificate of insurance
• Specific insurance carriers
• Policy expiration dates
• Other contractual requirements

 

If you have received an insurance requirement from a client, send us the requirement before purchasing or changing coverage.

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Professional Liability Insurance For Government Contractors

Government contractors and subcontractors may encounter insurance requirements as part of solicitations, contracts, subcontracts, or vendor registration.  Requirements can vary significantly based on:

• Type of service
• Contract value
• Government agency
• Scope of work
• Professional responsibilities
• Contract terms
• Applicable regulations

 

If your business is pursuing government contracts, we recommend reviewing the insurance requirements early in the contracting process.  Sams One Stop also provides government contracting consulting services, including assistance with certifications, registrations, proposal writing, and contract-readiness services.

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How Much Professional Liability Insurance Do I Need?

There is no single professional liability limit that is appropriate for every business.  The appropriate limit can depend on:

• Type of professional service
• Annual revenue
• Client requirements
• Contract requirements
• Potential financial impact of an error
• Number and type of clients
• Industry
• Claims history
• Professional credentials
• Size of projects
• Existing assets
• Risk tolerance

 

Some contracts may require specific limits.  For example, a contract might request:  $1 million per claim / $1 million aggregate -  while another contract may require different limits.  Do not assume that one liability limit is appropriate for every professional business.

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How Much Does Professional Liability Insurance Cost in Texas?

There is no universal price for professional liability insurance.  Premiums can vary based on factors such as:

• Profession
• Type of services
• Revenue
• Location
• Claims history
• Coverage limits
• Deductible
• Prior acts exposure
• Experience
• Client type
• Contract requirements
• Insurance carrier underwriting

 

A consultant with relatively limited professional exposure may have very different insurance costs from an engineer, architect, healthcare professional, or technology company.  The best way to determine your available options is to provide information about your actual business operations.

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Professional Liability Insurance In San Antonio & Throughout Texas

Sams One Stop is based in San Antonio, Texas, and provides insurance services for qualifying businesses and professionals throughout Texas.

We can help professionals explore insurance options for:

• Consulting businesses
• Real estate professionals
• IT and technology businesses
• Accountants and bookkeepers
• Engineers
• Designers
• Business consultants
• Professional service businesses
• Government contractors
• Other qualifying professional operations

 

Coverage availability depends on the insurance carrier, profession, policy requirements, and underwriting eligibility.

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Why Work With Us

Insurance + Business + Real Estate Experience

Sams One Stop/Sams Insurance Group provides more than insurance services.  Our broader services include:

• Insurance and bonds
• Real estate support
• Property management support
• Loan servicing
• Business consulting
• Government contracting consulting

 

That broader perspective can be useful when professional liability insurance is connected to a real estate transaction, business contract, government contract, professional services agreement, or other commercial activity.  We focus on understanding what your business actually does rather than assuming every professional needs the same insurance policy.

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Request A Professional Liability Insurance Quote

If your business provides professional services, don't wait until a client makes a claim—or until a contract is sitting on your desk—to determine whether you have appropriate professional liability coverage.

*Tell Us About Your Business

Provide information about your profession, services, revenue, clients, existing insurance, and any contractual requirements.

*We Review Your Insurance Needs

We'll review the information and determine what professional liability or E&O insurance options may be available.

*Review Your Coverage Options

We'll help you understand the available limits, deductibles, policy structure, and other important considerations.

Contact Sams One Stop/Sams Insurance Group

Phone: (210) 788-1034
Email: aaron@samsonestop.com

4063 East Houston St
San Antonio, TX 78220

Have a Contract Requiring E&O Insurance?

Send us the insurance requirements before purchasing coverage.

We can review the requested insurance requirements and help determine what professional liability coverage options may be available.