California License #4472487 | Texas License #3365362 | NPN License #21655529

Professional liability insurance (also called Errors & Omissions insurance) covers claims that your professional advice, services, or decisions caused a client financial harm — even if no physical injury or property damage occurred.

Typical coverage includes:

• Claims of negligence or oversight
  
  
• Errors in design, inspection, or supervision
  
  
• Missed deadlines that caused project delays or losses
  
  
• Breach of professional duty
  
  
• Legal defense costs, even for false claims
  
  

If you sell expertise, sign off on work, or advise clients — this policy protects your professional judgment.

Professional services liability specifically protects businesses or individuals who provide licensed, technical, or consultative services.

It covers financial loss claims that arise from:

• Faulty recommendations
  
  
• Inaccurate specifications
  
  
• Misrepresentation or missed project requirements
  
  
• Breach of contract in professional execution
  
  

Architects, engineers, surveyors, consultants, software developers, and design-build contractors often require this specialized coverage — especially when working under tight specs or code compliance.

Yes — professional liability insurance is essential if your work involves judgment, plans, consulting, or expertise that clients rely on. Even when you’re not at fault, lawsuits cost time and money.

Why it’s worth it:

• Legal defense costs can exceed $25,000 even for unfounded claims
  
  
• Clients often require it for contracts or compliance
  
  
• It builds credibility and shows you stand behind your work
  
  
• Without it, you absorb the full cost of claims out-of-pocket
  
  

If one error — real or perceived — could hurt your client financially, then professional liability coverage is not optional.

Example:

A design-build contractor creates a floor plan for a commercial space that fails to meet code. After a city inspection halts construction, the client sues for project delays and lost revenue.

Even if the error came from a subcontractor or miscommunication, the contractor who stamped the plan is liable.

In this case, professional liability insurance would cover legal fees, settlements, and expert witnesses, saving the contractor from financial ruin.

Professional liability insurance typically costs $600 to $2,500 per year, depending on:

• Your industry and trade classification
  
  
• Number of employees or subcontractors
  
  
• Annual revenue
  
  
• Prior claims history
  
  
• Requested policy limits (e.g., $1M/$1M or $1M/$2M)
  
  

🧠 Tip: Solo consultants and designers often qualify for lower rates, while engineers or high-liability trades may pay more. Bundling with general liability or workers’ comp can reduce costs.

Example claim:

An HVAC consultant recommends a ventilation system that fails to meet energy efficiency standards. The client sues for $65,000 in redesign costs and project delays.

This type of claim is purely financial — no one was injured, but the error in advice caused loss.

Professional liability insurance would cover:

• Defense attorneys
  
  
• Negotiated settlement
  
  
• Expert witness fees
  
  
• Associated legal costs
  
  

These situations happen often — especially when contractors or consultants sign off on plans, scopes, or timelines.

You need professional liability insurance if:

• You offer specialized advice or services
  
• Your work is intellectual, technical, or consultative
  
• Clients rely on your professional certification, license, or recommendations
  
• You sign contracts that involve design, planning, or supervision
  
  

Industries that need PLI include:

• Architects & engineers
  
• Consultants & project managers
  
• Surveyors & inspectors
  
• Software and IT professionals
  
• Design-build contractors
  
• Freelancers & small business owners who advise clients
  
  

If your opinion can shift the outcome of a project — you need PLI.

Typical limits for professional liability insurance are:

• $1,000,000 per claim / $1,000,000 aggregate
  
  
• $1,000,000 / $2,000,000 is common for higher-risk professions
  
  
• Some contracts may require project-specific endorsements or umbrella coverage
  
  

The right limit depends on your contract size, industry, and client requirements. We tailor each policy to match your actual exposure.

Yes. Professional liability insurance is generally 100% tax deductible as a business expense under IRS guidelines.

It’s considered an “ordinary and necessary expense” for protecting your operations — just like rent, payroll, or tools.

Always consult your accountant or CPA to ensure proper classification under your business entity type (LLC, S Corp, etc.)..

If you’re referring to professional liability insurance with a $100,000 limit, it’s generally not recommended — the minimum industry standard is usually $500K to $1M.

That said, for micro-businesses or freelancers, a $100,000 limit might cost $300–$600/year, depending on industry.

However, many clients or government contracts won’t accept limits that low — and one claim can exceed that fast.

Example scenario:

A structural engineer signs off on a retaining wall design. Months later, shifting soil causes damage to a neighboring property. The client sues, claiming the engineer failed to account for soil type.

Even if the cause was weather-related or tied to another contractor’s work, the engineer is on the hook for their part in the design approval.

Without PLI, you’re paying legal fees, defense, and settlement costs out-of-pocket — even if your insurance carrier finds you not at fault.

A $1,000,000 professional liability insurance policy generally costs:

• $600–$1,500/year for low-risk industries (e.g., consultants, freelance designers)
  
  
• $1,500–$2,500/year for higher-risk fields (e.g., engineers, architects, construction supervisors)
  
  

Pricing depends on:

• Trade classification
  
• Claims history
  
• Revenue and subcontractor exposure
  
• State and regulatory environment
  
  

🧠 This limit is widely accepted for private contracts, small public jobs, and vendor agreements — and provides strong defense coverage.