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How Much Does Professional Liability Insurance Cost? (2023 Rates)

The phrase “mistakes happen” is a common one. Unfortunately, not all mistakes are worth the same. For professionals, mistakes can cost lots of millions, and in some cases, it could mean the loss of lives. 

Even then, it’s still almost impossible to prevent errors once in a while. Mistakes are part of our existence, and it’s what makes us humans, after all. 

That is why professionals are often advised to get themselves professional liability insurance. But how much does it cost? Read on to find out.  

How much is the average monthly cost of professional liability insurance?

Regardless of insurance policy limits, the average monthly cost of professional liability insurance for a small business is $65 ($780 annually). Because it excludes outlier high and low premiums, the median cost provides a more accurate estimate of what your business is likely to pay than the average cost of business insurance.

Most small business owners (51 percent) pay between $500 and $1,000 per year for insurance, with 18 percent paying less than $500. These figures are based on examining thousands of insurance policies purchased by small business customers.

This is just the average. Your policy’s premiums will be different. Make sure you shop around with a few companies or with a digital broker like CoverWallet or to compare several quotes to select the cheapest one for you.

What factors affect the professional liability insurance cost?

Several aspects of your business influence the cost of your professional liability insurance, including:

Deductibles and coverage limits

Professional liability coverage limits range from $250,000 to millions of dollars. The higher your limits, the higher your premium. If you choose a lower deductible, your premium will be higher.

When deciding on coverage limits, consider the annual cost of your policy and the potential costs if a client sues you. You need enough coverage to cover any damages as well as defense costs.

A typical professional liability policy has a coverage limit of $1 million (per occurrence and aggregate), which means it will pay out up to $1 million for a single claim or over the policy’s life.


The level of risk varies by profession, as does the financial impact of a mistake. All of this is taken into account by insurers when determining rates. As a result, professional liability insurance for an engineer is typically more expensive than coverage for a fitness instructor.

Years of experience in business

Startups should expect higher professional liability premiums than larger corporations. However, if you maintain a clean claims history, your insurance costs should decrease as your company grows.

History of claims

Prior professional liability claims are a major red flag for insurers. When it comes to commercial insurance, red flags imply higher premiums.


If you work in a city with a high claim rate or legal costs, your premiums will be higher.

Employees’ number

The more employees you have, the more likely it is that one of them will make a mistake that leads to a lawsuit. The increased risk will increase your professional liability costs.

How to get cheap professional liability insurance?

To get cheap professional liability insurance, you need to control the bill your insurance company will give you.

Some aspects of your professional liability costs, such as industry and level of experience, are beyond your control. There are, however, other factors that you can control to reduce the overall cost of your policy. They are as follows:

Pay your premium in advance. 

Insurance companies frequently give you a discount if you pay your annual premium in one lump sum rather than monthly.

Modify your deductible and coverage limits

Choose a higher deductible or lower coverage limits to reduce your overall costs. Ensure that your deductible is reasonable and that your policy provides adequate coverage for potential claims.

Combine your policies

Combine your professional liability policy with other types of business insurance to save money. For example, contractors usually combine professional liability insurance with their general liability insurance policy by adding a professional liability endorsement to their general liability insurance policy. Look for insurance companies that offer this option.

Maintain a spotless record

To avoid professional liability claims, maintain a high quality and attention to detail.

Compare prices to find the best deal.

Insurance companies differ. Some companies have better financial standing and can offer policies at better prices. So, to get the best price, get quotes from several companies to compare coverage and prices. The only way to find the best and cheapest quote for your contracting business is to shop around and compare several quotes.

Don’t stop looking for bargains even after getting a quote. Before you renew your policy, make sure you get new quotes. Insurance companies frequently change their quotes and rates. In a year, your quotes will have changed. So, when it comes time to renew, make sure you shop around again to find the best deal for your company.

What is professional liability insurance?

Professional liability insurance protects you and your company from claims that might cause you losses. These claims or lawsuits come when your client or customer believes that your expertise has been less than satisfactory. 

Depending on the industry in which your company operates, this policy can have different names. For example, it is known as “medical malpractice insurance” for doctors and nurses. Real estate agents and lawyers may call the policy “Errors and Omissions (E&O).” The policy is called “technology errors and omissions in tech and software engineering.”

When a customer sues you or your company because of a mistake made by you or your company, professional liability insurance can cover your legal expenses, including hiring a lawyer.

Although the policy differs from one insurer to the other, professional liability insurance typically covers incidents like the following: 

  • Missed deadlines 
  • Mistakes and oversights 
  • Negligence 
  • Services paid for but not performed 
  • Unsatisfactory advice, products, or services

Even though the policy protects you from claims and lawsuits, professional liability insurance might not cover the following: 

  • Business vehicles
  • Customer injuries 
  • Damaged business property 
  • Employee discrimination lawsuits
  • Employee injuries 
  • Property damage

To cover any of the above, you may have to supplement your protection by buying additional policies. That is why you must discuss your options with your insurer before you pay for any policy. 

Who needs professional liability insurance?

Every business comes with a significant and peculiar amount of risk. So, as a business owner, you should consider carrying this policy to protect you from possible exposures. In some cases, general liability may cover many of these risks. 

However, general liability insurance offers only limited coverage. Its coverage does not include claims that have to do with professional services. That said, you will need professional liability insurance if your answer is yes to the following questions. 

  • Do you want to be protected from anything that could go wrong when providing professional expertise, services, or products to customers?
  • Do you want to be protected from negligence claims?
  • Do you want to be protected from financial risks?
  • Do you want to make sure that your company’s assets are safeguarded?

How to buy professional liability insurance?

To buy professional liability insurance for your company, you have many options. The options are grouped into three broad categories. They include the following:

Traditional insurance companies

Like the name, companies in this category come to mind when people talk about insurance. Most of them have experience and financial stability to over you superior coverage options. They cover most businesses and even those businesses in the riskiest industries. 

Examples of companies in this category include:


These companies are relatively new in the industry. Like fintech companies, these are tech companies to make insurance easy and affordable. They help companies find the most suitable and affordable quotes for their businesses online. Some even claim that using their website can help you cut a lot of costs for your professional liability insurance. 

Examples include:

Digital brokers:

These are not such young companies as insuretech companies. These companies do not have any policies of their own; instead, they help companies connect with their insurers so they can buy the policies of their choice. This is probably a good place to start if you have not purchased a policy before.   

Examples you can use include:

  • CoverWallet
  • Policy Sweet
  • Simply Business
  • Smart Financial

Professional liability insurance costs by different industries 

Like we said earlier, the cost of professional liability insurance largely depends on the industry where you do business. As such, we have a more detailed explanation of the cost of Professional liability for different professionals as follows:

Professional liability insurance cost for lawyers

Also called legal malpractice insurance, professional liability insurance for lawyers cost from $500 a year for new attorneys to $6,000 a year for experienced attorneys in high-risk practices. A typical experienced attorney should expect to pay $2,000-$3,000 a year for a good professional liability insurance policy. Learn more here.

Professional liability insurance cost for nurses

Also called nursing malpractice insurance, both registered nurses (RN) and nurse practitioners (NP) need to have professional liability coverage. They expect to pay $500 to $2,000 a year a professional liability insurance policy. Nurses with different years of experience and in different practices should pay different amount. Learn more in this article

Professional liability insurance cost for consultants

Different consultants will pay different amounts for their professional liability insurance policies. An IT consultant can pay $60 a month while an investment advisor can pay up to $250 a month. Consultants in different industries are exposed to different types and levels of risks, therefore the premiums of their professional liability insurance policy, also called E&O policy, will vary. Learn more in this article

Professional liability insurance cost for engineers and architects

Engineers and architects need to protect themselves with professional liability insurance policies. They should expect to pay around $150 a month, although it varies depending on the type of engineers. Learn more in this article.

Professional liability insurance cost for teachers

Teachers need their own professional liability insurance policies to protect themselves, even their school or disctrict may carry a group policy already. Professional liability insurance for teachers is quite inexpensive, just about $100 a year. Learn more in this article.

Professional liability insurance cost for federal employees

Federal employees should have their own professional liability insurance policies to protect them in case they are used and the government elect not to protect them for any reason. Federal employees should expect to pay $250-$500 a year for their own professional liability insurance policies. Learn more here.

Learn more at professional liability insurance costs for different professionals

Final thoughts

Professional liability insurance should be on your top priority list if you are a professional. With patience and the right effort, you should be able to find excellent coverage at an affordable price.

 There is no ideal insurer that fits the bill for all companies. Every business requires a unique insurance provider. So, when it comes to purchasing professional liability insurance, shopping around is the best way to make an informed decision. 

Compare quotes from various companies and determine which ones provide the best policy and at the best price for you. The options listed above are just a few online options for comparing rates and quotes. Besides, you can always use the services of knowledgeable agents near you to see your options.

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