In 2017, the gross written premium of insurance worldwide reached a whopping $4.8 trillion. That’s for both life and non-life insurance, including homeowners and auto policies.

If you’re a homeowner who has a part to pay in the $8.8 trillion mortgage debt in the U.S., you likely have a home policy. Or if you own one (or more) of the 276.1 million registered cars in the country, then you also have car insurance. After all, auto insurance is a must in all states, except New Hampshire and Virginia.

So, how about liability coverage for businesses? What is and who needs professional liability insurance? Do you even need it for a business you’re running from your garage?

All these and more, we’ll answer and address in this post, so be sure to keep reading!

The Lowdown on Professional Liability Insurance

You may have heard of professional liability insurance as “errors and omissions” insurance. It’s a special type of insurance specifically made for professionals and businesses. These protect against clients claiming they suffered financial harm in two ways.

The “errors” part covers you for lawsuits claiming you or your business made a mistake. “Omissions” are for claims saying your business failed to provide an expected service.

Your homeowners’ policy nor your general liability insurance doesn’t include this coverage. That’s unless you get a general and professional liability insurance policy. So, you need this insurance even if your business operates from your garage.

What It Covers and What It Doesn’t

Most E&O policies pay for the cost of legal defense arising from civil lawsuits. Depending on how robust your coverage is, it may also cover awarded damages.

Most claims that this insurance covers include negligence and misrepresentation. If a client sues you for giving “inaccurate advice”, your insurance will also kick in and cover you. It’s also common for this insurance to cover violation of good faith and fair dealing claims.

Note that professional liability insurance doesn’t cover criminal prosecution though. Depending on your industry, your policy may also have explicit coverage exclusions. So, be sure to have your writer or insurer give you a thorough explanation of your coverage.

So, Who Needs Professional Liability Insurance?

Professional liability insurance is a legal requirement for some medical and legal practitioners. In such cases, the liability coverage they need is malpractice insurance. You may want to check out this website for a more comprehensive explanation.  

“But I’m not a doctor or a lawyer, do I need professional liability insurance?” So long as your business works and interacts directly with clients, then you most likely do. If you provide professional service, even consultancy solutions, this insurance can benefit you.

Let’s be a bit more specific though on which professionals can benefit the most from this policy.


If you’re an aesthetician (beauty technician), you should consider getting professional liability insurance. This can save you from a lawsuit in case clients end up being unhappy with a haircut or other service you gave them.

Another way it can protect you is when a client claims you didn’t perform part of a facial service you said you would. Or, you committed an accidental mistake by giving the customer the wrong hair color. Either way, your insurance can cover you for such claims made against you by your clients.

Fitness Advisors and Gym Instructors

Personal health and fitness industry professionals should also look into professional liability insurance. Whether you give diet advice or you’re a gym instructor, this insurance can protect you from a lawsuit.

For example, you created a health and fitness plan for a customer, saying this can help them lose some pounds. But after six months of being on the program, the client still hasn’t seen results. This could lead to your client becoming unhappy and dissatisfied and suing you.

Your professional liability insurance policy can protect you in such cases. It can also cover you if a customer gets hurt while you supervise them during gym workouts.

Technology or Computer Professionals

Experts say that there will be 162 million laptops and 84.5 million PCs shipped worldwide in 2022. This is likely the reason you want to launch a computer-related business. If so, then you may want to get professional liability insurance.


Say your business would also offer advice to customers who want the ultimate gaming PC set up. Now, these systems can cost up to a whopping $2,000. So, it’s understandable if clients get mad because they’re unhappy with your advice.

They may claim that you gave them the wrong info or that you didn’t explain things as well as you should have. Either way, your insurance coverage can protect you from such lawsuits.

Professional Contractors

Whether you’re a roofing or HVAC contractor, consider getting professional liability insurance. The same goes true for residential and commercial plumbing and cleaning contractors. Jobs in these industries are complex, and a single mistake can lead to project delays.

There’s also the possibility of materials used not being of outstanding quality. If these fail, it won’t be long until you get served by the client. Failed roofing, HVAC systems, and plumbing components are common causes of liability claims.

Cleaning contractors are also at risk of lawsuits for “not doing their job right”. For example, a client may say that you failed to get rid of molds that can cause illnesses. Or, they can sue you for using the wrong cleaning solutions and damaging their furniture.

Professional liability insurance can protect your contractor business from such claims and lawsuits. But it may also be a better idea to get both professional and general liability insurance. General liability can help cover physical injuries or damages to others’ property.

Don’t Risk It: Get Professional Liability Insurance Now

Now that you know who needs professional liability insurance, don’t put off getting it! Insure your business as soon as possible, so you can lower your risks of facing a lawsuit. Especially since the U.S. sees more than 40 million lawsuits filed every year.

Need business advice specific to the food and beverage industry? Then be sure to check out this list of health code violations you should avoid at all costs! To know your liability you can go and check on Constructaquote.

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