professional liability insurance

Professional Liability insurance

What is Professional Liability Insurance?

If you make mistakes in providing professional services to clients or customers, professional liability insurance will protect you and your company. This insurance is also called errors and omissions insurance (E&O). Even though you are an expert in your field, mistakes can happen. If your customer or client believes that a mistake in your services has caused financial loss, they may sue you.

professional liability insurance

What Does Professional Liability Cover?

Insurance for professional liability covers claims of:


  • Negligence
  • Misrepresentation
  • Inaccurate advice
  • Personal injury, such as libel and slander

Even if your client doesn’t believe you did anything wrong, they can still sue you for negligence.

You’ll be responsible for expensive legal defense costs if you don’t have coverage.

  • Your client is harmed by an accounting firm’s clerical error.
  • After you fail to deliver flowers on the promised date, a client sues the florist shop.
  • A couple was looking to start a daycare and your real estate company sold them a townhouse. The townhouse association told the couple that they could not use the property as a business when the couple moved into the house. Your negligence is what the new owners are going to sue you.

PROFESSIONAL liability insurance 

What Professional Liability Insurance Doesn’t Cover 

The professional liability insurance does not cover all types of claims. You won’t be able to use it for claims involving:


  • Bodily injury and property damage: A general liability policy will cover you against claims that your business has caused harm to someone or their property.
  • Workers’ compensation: This insurance policy will help your employees recover from injuries and illnesses that are work-related.
  • Data breach: This insurance is designed to help businesses respond to incidents where they lose personally identifiable information (PII). This coverage is sometimes called cyber liability insurance by some insurers.

professional liability insurance

How Professional Liability Insurance Works

A lot of insurance companies offer professional liability insurance policies on a claims-made basis. They have a retroactive date and extended reporting periods.

You are covered for incidents that occur on or after the retroactive date.

Extended reporting periods are used to cover claims that were filed after the policy ends. This period is usually between 30 and 60 days. However, you can extend it for an additional fee up to one year.

The extended reporting period is the only time your insurance company will cover claims against your business. The claim must arise from an error or omission covered by your policy that occurred after the retroactive date. It may also cover:

  • Damages
  • Legal defense costs
  • Discipline proceedings
  • Earnings loss
  • Assistance with subpoena

An occurrence policy can be used for some policies. This will provide coverage for any losses that occur during the policy period.


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Burke Texas Acquisitions is able to perform a formal business appraisal for any business. Our firm is a leading provider of services in the Texas lower mid-market. Our clients are valued between $1 million and $50 million, and come from many industries. Burke Texas Acquisitions has assisted Texas companies in securing financing for all types, including equity financing, mezzanine financing and factoring receivables. We have the expertise to solve any type of financing problem.


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From Our Founder

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The chances of closing a successful deal are dramatically increased when you work with qualified, experienced business brokers/advisors. Our business brokerage is a top choice in the Texas area. We have a track record of closing deals. For over a decade our group/partners have closed more than 200 transactions.


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