Professional Liability is important insurance protection for many types of business owners. It’s common to think about business property insurance when covering the unexpected events of fire, theft, and storm damage that can cause loss to commercial buildings, office contents, and inventory, but a wise business owner will also consider the protection that comes with financial loss that may arise from unhappy clients or customers. Professional Liability is not included in a standard Business Owners Policy, Homeowner’s Insurance, Business/Personal Auto Insurance, or General Liability policies.

When client’s expectations are not met or believe that the service was sub-standard or contained misrepresentations, the business owner could face a lawsuit. Professional Liability insurance protection would help cover court fees and litigation costs associated with a lawsuit. It’s important to understand is that the costs and fees associated with fighting litigation can be astronomical even if the law agrees with the business owner.

Professional Liability Insurance In The Real World

Here are some examples of businesses and situations in which Professional Liability insurance would be important.

Event and Wedding Planner

An event planner may sell a package that includes marketing, organizing ticket sales, providing catering, setting up, breaking down, and cleaning after the event. While unintentional, the representative left out specifying that the actual venue would not be included in the cost, thereby requiring the client to spend additional time and money securing a location for the event. The client could sue for misrepresentation of services provided.

Financial Services

Insurance agents, wealth managers, estate planners, and investment counselors all understand the risk involving unhappy clients that could cause them to lose their business and even have their licenses revoked. For professionals in these types of business, Errors and Omissions Insurance is crucial and often required. Even if someone runs a small-scale consultant service to help guide people to the right financial services, it’s important to protect the business with Professional Liability.


Professional accounting firms that provide tax services, invoicing, payroll, and bookkeeping services for individuals or business owners would be required to have Professional Liability coverage. Should the accountant fail to submit proper documents causing the client to pay penalties and additional tax money, the client would likely sue the accountant for their mistakes.

Medical Services

Doctor’s practices, psychiatric and counseling services, veterinary services, home health care providers, and many other types of healthcare providers will find Professional Liability (often referred to as Malpractice insurance) necessary and important. Medical lawsuits have been steadily rising for many years and there is no evidence to support this will change.


It almost seems ironic, but attorneys also need professional liability to protect them from lawsuits. At any time, a client may feel they were misrepresented in court or in legal proceedings or that the attorney lacked experience in the type of advice provided.

Field Experts

There are many different types of businesses that would benefit from the protection of Professional Liability Insurance. In general, if a business boasts to be an expert in a field or collects fees for opinions and advice, there is a need for Professional Liability coverage: Home interior designers, builders, tradesmen, trainers, performance-based services (music, dance, children’s entertainment), tailors, life coaches, consultants, and many more.

It’s important to also understand that there are many different types of coverage options and protection limits. As with most insurance protection, it’s better to plan for the worst. Smart business owners will carefully investigate options to ensure that the coverage and limits provided in the policy will fully protect in those situations.

Whether intentional or not, business owners face miscommunication issues with clients on a regular basis. With Professional Liability protection, there is peace of mind that even an unintentional slip or blunder will not cause a devastating loss and business can go on uninterrupted.