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What is Professional Liability Insurance?

Common questions about professional liability/errors and omissions insurance

Here are some common questions people ask about professional liability insurance, also known as errors and omissions insurance (E & O insurance). If you have any other questions not listed here don't hesitate to contact one of our licensed advisors, either by phone at 866-283-7545 (Monday - Friday, 8 am - 10 pm EST) or email.

 

What is the difference between professional liability insurance and errors and omissions insurance?

Professional liability insurance and errors and omissions insurance are essentially the same thing. People use these terms interchangeably, and they are referring to the same basic product.

 

Why do I need professional liability insurance?

You often run extremely important and complex projects for your clients that they may not fully understand. Professional liability insurance is especially important for businesses like IT/technology consultants, business consultants and marketing consultants for whom incorrect advice or a failure to perform professional services could lead to a lawsuit. Even if you haven’t made a mistake, you can still be sued. A general professional liability insurance policy from Hiscox will cover legal fees, protecting you and your business from potentially crippling costs.

 

Why is the Hiscox quote and buy process so much simpler than other insurers?

Two reasons: specialization and technology.

 

A business consultant will probably never be sued for a customer getting food poisoning. So why would an application ask you questions associated with coverage that would only apply to a restaurant business? The questions on a Hiscox insurance application are only relevant to your business. Other insurers often use a one-size-fits-all application focused on businesses unrelated to your own. It’s a waste of time. Hiscox knows your time is money.

 

Technology is evolving and so is the way you can buy insurance for your business. Hiscox offers professional services businesses a new way to buy small business insurance either online or over the phone in minutes. If you would like to speak with a licensed agent, you can call us at 866-283-7545 (Monday - Friday, 8 am - 10 pm EST). We’re always happy to help.

 

How do I benefit from buying directly from Hiscox?

When you buy directly, you deal directly with Hiscox. Our team of licensed small business insurance advisors only focuses on professional businesses like yours. This means you speak to a knowledgeable specialist who can deliver personalized recommendations about the insurance you need for your specific profession.

 

As well as great service you also get great value. When you buy directly there are fewer people involved in the process. Fewer people means less time and cost. Hiscox passes these savings on to you, allowing you to get the right coverage at a competitive price. Saving your small business dollars just makes sense.

 

How does Hiscox tailor a professional liability policy to meet my specific needs?

 

We understand the risks your professional small business faces on a daily basis. We also understand the risks an IT/technology consultant faces are different than those of a marketing consultant. It’s common sense, right? We tailor coverage to your specific profession.

 

For example, an IT/technology consultant would most likely need software copyright infringement coverage as part of its standard policy. This is irrelevant for most marketing consultants, so we don’t include it. This approach also means that you only pay for the coverage you really need.

 

You can also choose the deductibles and coverage limits you need to suit your business. Over time, you can contact us to change your limits of protection as your business needs change.

 

What types of businesses can buy general professional liability insurance?

We provide coverage for many types of professional services businesses including IT consultant insurance, marketing consultant insurance, and business consultant insurance. However, Hiscox also insures recruitment consultants, PR specialists, graphic designers and interior designers, and offers many other types of professional business insurance. If you don’t see your specific occupation on this list, contact us to find out if we can provide professional liability coverage for your business.

 

What do I need to get a professional liability insurance quote?

The quote and buy process is very simple, whether you get a professional liability insurance quote online or call an advisor. We’ll ask you for some basic information about your business and services. You’ll also be asked what risk management practices you currently use. Why? Well, we like to give our best rates to businesses that actively try to reduce their chances of being sued. 

 

I need professional liability for a contract. Is immediate coverage available?

Yes, it is. Many clients require their consultants or contractors to have a minimum level of professional liability insurance coverage before they can start a professional engagement. Typically, they will want to see proof you have $1,000,000 of professional liability insurance.

 

We can provide this for you online immediately, or you can call one of our expert advisors and your policy will be issued via email, typically in about 15 minutes. You will receive a certificate of insurance in your welcome pack, which you can then email or post to your client as proof of insurance. It’s as simple as that.

 

How can I save money on my professional liability insurance coverage?

Buying this type of insurance directly from Hiscox will often mean you enjoy greater overall value. We like to reward businesses that actively manage their risk. Depending on your specific business, you will be asked questions about the types of risk management practices you have in place, allowing us to offer you our best rates.

 

We also offer customers up to a 5% discount if you buy two or more Hiscox products. Also, by choosing a higher deductible (the initial amount you pay for each claim), you can lower your premium. It’s only fair, as you’re taking on more of the risk.

 

How much does a professional liability policy cost?

Professional liability insurance premiums vary a lot depending on several factors, including the size of your business, your occupation, the types of activities you conduct, and the level of protection you choose. However our minimum premiums start from as little as $270 a year. Visit our professional liability insurance quote page and see some examples, or get a simple, no-obligation quote for your business now.

 

What coverage limits do you offer?

Hiscox offers a range of professional liability limits. Our licensed advisors will guide you on what your business needs. Limits start at $250,000 ($500,000 in New York) and go up to $2,000,000. If you have any questions contact a licensed advisor at 866-283-7545 (Monday - Friday, 8 am - 10 pm EST).

 

What deductible options do you offer?

For professional liability, Hiscox insurance offers a range of deductible options. This is the amount you must pay on each claim before the policy makes any payments. Options range from $1,000 to $10,000. The higher the deductible, the lower your premium, as you take on more of the risk.

Start Your Quote

You can quickly get a no-obligation professional liability insurance quote online and easily select different deductible amounts to see how they affect your premium. We’re sure you’ll find exactly what’s right for you. If not, feel free to contact us via email or by phone at 866-283-7545 (Monday - Friday, 8 am - 10 pm EST).

 

What is a “claims made and reported” policy?

Professional liability insurance only provides protection only as long as your policy is in force. This means that only the claims made and reported in the policy period will be covered. When you cancel your policy you may not have protection in place, even if a claim later arises from work completed during a period in which you had insurance. So it’s wise to keep coverage in place even after you have completed a project. However, if you must cancel your coverage, you can opt to purchase an extended reporting period (see the explanation below).

 

What happens if I cancel my policy?

You can cancel a policy at any time and we will refund any amount due to you on a pro-rated basis. However, should your business then be subject to a claim, it will not be covered unless an extended reporting period is in effect (see the explanation below).

 

What is an extended reporting period endorsement?

If you need to cancel your policy, Hiscox recommends purchasing an extended reporting period endorsement. This means that although your business has no protection for claims arising from future work, it is still covered in case you are sued for work previously completed. Hiscox charges a reduced amount for this, as we offer you a reduced level of coverage. For more information, please call a Hiscox licensed advisor at 866-283-7545 (Monday - Friday, 8 am - 10 pm EST).

 

Is professional liability insurance available in my state?

Hiscox is currently licensed to offer professional liability insurance coverage in many states across the U.S. However, if we are not currently licensed in your state, we can still help. We have access to specialist insurance brokers across the U.S. who may be able to assist you. Contact one of our licensed advisors at 866-283-7545 (Monday - Friday, 8am-10pm EST).

 

What should I do if I need to make a claim?

If you are a current Hiscox customer and need to make a claim, please call us immediately at 866-424-8508; this line is open 24 hours a day, 7 days a week. A Hiscox advisor will collect details and, if necessary, we will appoint a lawyer on your behalf.

 

What payment options exist for my professional liability policy?

Hiscox offers you a range of payment options, including debit and credit card (Visa, MasterCard and Amex). You can also choose to pay the full amount in one lump sum each year, or to pay on a monthly basis (with no fees added). We’re very flexible.

 

What is a retroactive date and how does it apply to a professional liability policy?

A retroactive date shows how far back Hiscox will pay valid claims, even if they may relate to work you completed before you took out a Hiscox insurance policy. Unlike many other insurers, we offer this additional coverage as standard.

 

Does a Hiscox professional liability policy cover work completed for my business by a independent contractor or temporary staff?

Yes. Claims arising from work completed by full-time employees and temporary staff, including independent contractors, are covered.

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This information is provided to assist you in understanding the coverage we offer and does not modify the terms and conditions of any insurance policy, nor does it imply that any claim is covered. Coverages are subject to underwriting and may not be available in all states.

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