BUSINESS LIABILITY INSURANCE
Professional Liability & E&O Insurance in Texas
Your clients trust you for your knowledge, advice and expertise. Professional liability insurance can help protect your business against certain claims arising from professional services, errors or omissions.
Professional liability insurance can help protect eligible businesses against certain claims arising from professional services, errors or omissions.
When Your Expertise Is Your Business, Your Advice Carries Risk
Consultants, designers, engineers, accountants, technology professionals and other service businesses are paid for what they know and the services they provide. Clients rely on that expertise to make decisions, complete projects and move their own businesses forward.
But even experienced professionals can face a claim alleging that a mistake, omission, inaccurate advice or failure to perform a professional service caused a client financial harm.
Professional liability insurance, also known as Errors & Omissions or E&O insurance, is designed to address certain claims arising from professional services. The Texas Department of Insurance describes professional liability coverage as protection for claims for damages arising from the performance or failure to perform professional services.
What Professional Liability Insurance May Help With
Professional Errors
A client may claim that an error in your professional work caused them a financial loss. Depending on the policy, certain claims arising from covered professional errors may be addressed.
Errors & Omissions
A missed detail, omission or failure to provide an agreed professional service can potentially result in a claim. E&O coverage is designed around certain professional-service exposures.
Client Financial Loss
Professional liability claims can involve allegations that a client’s financial interests were harmed because of professional services, advice or work.
Legal Defense
Depending on the policy, professional liability insurance can provide coverage for certain defense costs associated with covered claims.
Negligence Claims
Certain professional liability policies can respond to covered allegations of negligence arising from professional services.
Contractual Requirements
Some clients or contracts may require a professional to carry professional liability insurance and provide proof of coverage.
Professional Liability vs. General Liability
Professional liability and general liability insurance address different types of exposures. Having one does not necessarily mean you have the other.
| Coverage | Generally Designed To Address |
|---|---|
| General Liability | Certain third-party claims involving bodily injury, property damage and other covered liability exposures. |
| Professional Liability / E&O | Certain claims arising from professional services, errors, omissions or professional negligence. |
These are general descriptions rather than guarantees of coverage. Actual coverage depends on the policy, definitions, exclusions, conditions, limits and endorsements.
Who May Need Professional Liability Insurance?
Consultants
Management, business, operations and specialized consultants may face claims related to the professional advice they provide.
IT Professionals
IT consultants, technology providers and software professionals may have professional-service exposures in addition to cyber risks.
Engineers & Designers
Design decisions, calculations, specifications and professional recommendations can create specialized liability exposures.
Accountants
Accounting and financial services can involve professional advice where clients depend on accurate work and information.
Real Estate Professionals
Real estate professionals may face claims involving professional services, representations or alleged errors and omissions.
Other Service Professionals
Many other businesses provide specialized advice, expertise or services that can create professional liability exposures.
Texas Department of Insurance identifies professions including engineers, lawyers, IT consultants, electricians, HVAC professionals and childcare providers among businesses that may need professional liability coverage.
Pay Attention to Claims-Made Coverage
Many professional liability policies use a claims-made structure. That means the timing of when an incident occurred and when a claim is made and reported can be important to determining whether coverage applies.
Texas Department of Insurance explains that claims-made policies generally provide coverage for incidents that occur during the applicable policy period when the claim is reported to the insurer during that policy period, subject to the policy’s terms and any applicable provisions.
This makes policy continuity, retroactive dates, reporting requirements and other policy provisions important considerations when changing professional liability policies.
Examples of Professional Liability Exposures
Missed Deadline
A client alleges that a missed professional deadline caused a financial loss and seeks compensation from your business.
Professional Recommendation
A client claims that a recommendation or professional advice resulted in an unexpected financial loss.
Design or Specification Error
A client alleges that an error in professional plans, specifications or designs caused additional expenses.
Failure to Deliver a Service
A customer alleges that a professional service was incomplete, inaccurate or not performed as expected.
These examples are illustrative only and do not indicate that a particular claim would be covered. Coverage depends on the actual policy and facts of the claim.
Professional Liability Is Only One Part of Your Business Insurance Plan
Professional liability addresses a specific type of business exposure. Depending on what your company does, you may also need coverage for physical property, general liability, cyber risks, employees, vehicles and other exposures.
Coverage for certain third-party bodily injury, property damage and other liability exposures.
Cyber InsuranceCoverage designed around certain cyber, data and technology-related risks.
Business Owner’s PolicyA package that can combine certain property and liability coverages for qualifying businesses.
Professional Liability Coverage With a Personal Approach
Professional liability isn’t one-size-fits-all. An IT consultant, engineer, accountant and management consultant may have very different professional exposures.
At Lavon Insurance, we take the time to understand what your business actually does, how you serve your clients and what types of professional services you provide. From there, we can help you explore insurance options from available carriers.
Understand Your Business
We start by understanding your services, clients and professional exposures.
Compare Options
As an independent agency, we can explore available insurance options from multiple carriers.
Explain the Details
We help you understand limits, deductibles, exclusions and other important policy provisions.
Professional Liability & E&O Insurance FAQs
What is professional liability insurance?
Professional liability insurance is coverage designed to address certain claims arising from professional services. It is also commonly called Errors & Omissions or E&O insurance.
What is E&O insurance?
E&O stands for Errors & Omissions. E&O insurance is another common name for professional liability coverage designed around professional-service exposures.
Does general liability cover professional errors?
Not necessarily. General liability and professional liability address different types of risks. Texas Department of Insurance recommends reviewing the specific policies or discussing coverage with an agent to determine what is and isn’t covered.
Is professional liability insurance required in Texas?
Requirements can depend on the profession and circumstances. Texas Department of Insurance notes that some professions require professional liability insurance to obtain a license, while clients or contracts may also require proof of coverage.
Are professional liability policies claims-made?
Many professional liability policies use a claims-made structure. Claims-made coverage can make the policy period, reporting requirements and retroactive date important considerations. Always review the specific policy provisions.
How much professional liability insurance does my business need?
The appropriate limits depend on factors such as your profession, contracts, client requirements, business size, services provided and potential exposure. An insurance professional can help evaluate the limits available for your situation.
Your Expertise Is Valuable. Let’s Protect the Business Behind It.
If your business provides professional advice, expertise or services, let’s talk about professional liability and E&O insurance options that may fit your business.
Get a Professional Liability QuoteInsurance coverage is subject to policy terms, conditions, limits, exclusions, definitions and endorsements. Professional liability coverage varies by profession, insurance carrier and policy. Claims-made policies may also contain specific reporting requirements and retroactive-date provisions. This page is for general informational purposes and is not a contract or guarantee of coverage. Please review your policy and speak with your insurance agent about your specific business and coverage needs.