If you’re a small business and in the market for professional liability insurance, below are six of the major insurers that cover this type of insurance for small businesses. In order to get an idea of the prices where online quotes were offered, we looked at a hypothetical accounting business in Wisconsin that had been in business for three years and has three total employees.
- Nationwide: Best for Employment Practice Liability Coverage
- State Farm: Best for Customizable Plans
- The Hartford: Best for Plans Related to Specific Professions
- Hiscox: Best for Comprehensive Coverage
- Thimble: Best for Fast Online Experience
- Next Insurance: Best for Covering a Wide Variety of Professionals
Nationwide: Best for Employment Practice Liability Coverage
Nationwide offers a variety of customizable professional liability insurance plans so you can get the coverage you need for your specific type of business.
The professional liability plan covers errors and omissions (E&O) and employment practices like wrongful termination, wrongly refusal to employ, charges of discrimination, or invasion of privacy or defamation claims made against companies by employees. To get quotes, you have to enter very specific contact information for you and your business.
State Farm: Best for Customizable Plans
State Farm offers business and professional liability insurance. It helps you pay for defense and judgments that come from liability claims due to negligence or an error & omission (O&E) on your part. State Farm offers several different types of liability insurance:
- Commercial Liability Umbrella Policy
- Professional Liability
- Errors and Omission Liability
- Employment Practices Liability Insurance (EPLI)
- Not-for-Profit Organization Liability with EPLI
- Condo and Homeowners Association Directors and Officers Liability with EPLI
In order to get quotes, State Farm wants you to talk with an agent at one of the offices.
The Hartford: Best for Plans Related to Specific Professions
This is a solid company to look into if you want policies for specific professions. The Hartford specializes in offering professional liability insurance to specific types of professionals. For instance, the company specializes in professional liability insurance for consultants, accountants, home inspectors, tech professionals, real estate professionals and even lawyers.
For us, getting a quote online through the Hartford allows you to enter in your business information, but then links you to an 800 number in order to get an actual quote “based on the business location.”
Hiscox: Best for Comprehensive Coverage
Hiscox is known for its comprehensive professional liability coverage. As part of its professional liability coverage, Hiscox covers alleged or actual negligence, defense costs, personal injury, worldwide coverage, temp staff and contractors, claims for past services, and claims and damages. It also covers a wide variety of professionals, like therapists and marketers.
When we tried to do the quote process online, it gives you an 800 number to call to finalize some of the details of your business.
Thimble: Best for Fast Online Experience
Thimble is a company that specializes in the digital experience. Its website states that you can get your business insured in just 60 seconds. We tried the quote process at this site. Nothing popped up for accountants, so we entered “consultants and freelancers” as business type. You can select either a coverage limit of $1 million or $2 million. We selected $1 million.
However, the policy states it covers general liability, accidental injury or damage to property and products / completed operations coverage one year from inception. One person costs $5, and adding two others costs about $10. The site doesn’t clarify whether that’s monthly or one payment, however.
Next Insurance: Best for Covering a Wide Variety of Professionals
Next Insurance is another company that specializes in online business insurance plans. Plans for this company are billed monthly, which it’s nice enough to state right on the homepage. You can purchase professional liability / E&O Insurance right through the website.
Next Insurance also prides itself on having no extra fees, which can be an inconvenience through other providers. The policies are also geared to cover a wide variety of professionals, from electricians to nail technicians.
To get a quote, for this one we were able to list ourselves as accountants. The plans come as basic, pro and pro plus plans. The “most popular” pro plan with $1 million per claim, $1 million per policy and a $2,000 deductible comes to about $61 per month.
Different states might have different regulations on professional liability insurance. Some companies might be available in one state, but not the others. Here are our recommendations for the specific states:
- Top 5 Providers of Professional Liability Insurance in Florida
- Top 5 Providers of Professional Liability Insurance in California
Some of the most well-known companies to look into for professional liability insurance include Nationwide, State Farm, the Hartford, Hiscox, Thimble and Next Insurance. They each have their own strength and uniqueness. You should consider them carefully and choose the most suitable to your situation. It is always a good idea to consult with an insurance agent and shop around with 3-5 carriers to compare quotes.
1. What types of small businesses will need professional liability insurance?
All types of businesses could potentially benefit from professional liability insurance. If you provide any type of product or service for individuals or companies, a mistake, error or omission (E&O) on your part could lead someone to seek financial restitution.
However, certain businesses need it more than others because the losses could be far greater. The III lists several types of professionals that might benefit from professional liability insurance the most. These include: accountants, IT consultants, engineers, graphic designers, real estate professionals, insurance professionals, investment advisors, architects, management consultants and software developers. The institute suggests you consult with an insurance agent or your trade organization to see if this type of insurance is right for you.
2. Is professional liability insurance required by laws in all states?
According to the III, some states do require this type of insurance, so be sure to check with your state’s laws. Consult with your local Chamber of Commerce, or again, check with local trade associations.
3. What is usually excluded in professional liability insurance policies?
Insurance provider CPH & Associates lists several common exclusions:
- Illegal acts
- Services you provide under an entity name that is different from the one listed on the policy
- Illegal discriminations
- Punitive fines and associated costs
- Slander or libel
- Bodily harm to another person
However, different plans can vary, so it’s important to review your policy.
4. I am a lawyer or a financial advisor working at a firm, the firm buys professional liability insurance, should I still buy my own professional liability insurance? Why and why not?
This is a situation that carries some gray areas. Lockton Affinity, a personal training insurance provider, outlines the situation well. If you are an employee, the employer’s policy could cover you, but the policy might only offer an aggregate limit. That means you and all your co-workers are covered up to a certain limit, which you all may exceed. So you may want to carry your own policy to be safe.
If you’re a contractor, you are typically more responsible for your own costs. Many independent contractor contracts state that you are responsible for any legal fees that come up. You may want to consult with an insurance agent about your specific situation.
5. How is professional liability insurance different from general liability insurance?
They are quite different. General liability tends to protect from lawsuits and related costs. It also tends to cover medical expenses, damages and attorney fees that you’re legally responsible for.
Professional liability specifically covers damages resulting from professional errors and omissions (E&O) on your part relating to the work you perform.