Professional Liability (E&O) Insurance: What It Covers and What It Costs

Professional liability insurance, also called Errors & Omissions (E&O), covers claims that a business's professional work was wrong, not claims that someone got physically hurt. General liability specifically does not respond to a claim that you did the job incorrectly, that's exactly the gap E&O exists to fill.

What's the actual difference between general liability and E&O?

General liability covers physical-world claims, bodily injury and property damage. E&O covers claims about the quality of professional work itself: a missed deadline, a bad recommendation, an error in a deliverable, or a project that didn't deliver what was promised. A GL policy won't pay out on a client's claim that your advice or work product caused them a financial loss, only E&O will.

Who actually needs E&O coverage?

Any business whose product is advice, expertise, or a professional service carries this exposure: consultants, accountants, designers, IT contractors, and similar professional-services businesses. A client doesn't need to prove physical harm to sue over a bad outcome, just that the work fell short and cost them money.

How much does professional liability insurance cost?

Estimates vary by source, but a $50-$90 a month range is a reasonable, defensible estimate for a small professional-services business, with entry-level pricing sometimes lower for small consultancies.

Coverage type	Typical monthly cost
General liability alone	~$45/month
Professional liability (E&O) alone	~$50-$90/month
Both together (common for professional services)	Priced separately, often bundled in one application

Does a business need both GL and E&O?

Usually, yes, if it does any physical-world activity (client visits, equipment, an office) alongside professional services. Neither policy substitutes for the other: GL won't cover a bad-advice claim, and E&O won't cover a customer slipping in the office. A professional-services business with any in-person client contact typically carries both, not one or the other.

What does an E&O claim actually look like?

A design firm delivers a project with a costly error, a consultant's recommendation leads to a client's financial loss, an IT contractor's implementation causes downtime, these are all E&O claims, not GL claims. The common thread is that the client's complaint is about the work itself, not a physical injury or property damage.

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