What is professional liability (E&O)?
Short answer
Professional liability insurance, also called errors and omissions or E&O, covers claims that your advice, judgment, or professional service caused a client a financial loss. It responds to allegations of error rather than to bodily injury or property damage, which general liability handles.
What professional liability covers
- Defense costs for client claims about your services
- Settlements and judgments for alleged errors or omissions
- Negligent advice, missed deadlines, and failure to deliver
- Personal injury extensions such as libel or slander, where included
Who needs it
Any profession paid for advice, judgment, or specialized service: attorneys, CPAs, dentists, technology firms, insurance agents, consultants, real estate professionals, and more. If a client can allege your work caused a financial loss, professional liability is the responding policy.
Why it is called E&O or malpractice
The same coverage carries different names by profession. Licensed professions such as law, dentistry, and medicine call it malpractice. Technology firms, insurance agents, real estate professionals, and consultants call it errors and omissions, or E&O, because clients usually allege a mistake or a missed step rather than deliberate misconduct. Underwriters use different forms for different professions, so the wording, exclusions, and pricing differ even though the coverage concept is the same.
How it differs from general liability
General liability covers third-party injury and property damage. Professional liability covers financial loss from services. Most businesses need both, plus cyber, workers compensation, and property coverage as the operation requires.
Common questions
- Is E&O insurance the same as professional liability?
- Yes. Errors and omissions insurance and professional liability insurance are the same coverage under two names, and both are written claims-made. The profession you work in usually determines which name appears on the policy.
- Is professional liability the same as malpractice insurance?
- Yes, for practical purposes. Malpractice is the term used for licensed professions such as law, dentistry, and medicine, while E&O is used for technology, agents, and consultants. The coverage concept is the same.
- Is professional liability required?
- Rarely by statute, but often by clients, contracts, courts, and referral relationships. Many firms find coverage is effectively a condition of doing business.
- How much does professional liability cost?
- It varies widely by profession, revenue, limits, deductible, and claims history. Pricing is set after underwriting, so a quote is the only reliable figure.
Want to know what this means for your business?
Tell us what you do and we will explain which coverage responds, which wording to check, and what to ask a carrier. No obligation, and no coverage is bound by asking.
Professional Resource Insurance Agency, LLC. CA License #0G81238. Definitions are general information, not coverage advice for a specific policy.