Professional Liability Insurance

Business owners want to do a good job for their clients or customers. If you own a business, you know this. But you probably also know that the business climate today is fraught with dangers. Our society has become so litigious that an unhappy customer can sue you for any reason. Or no reason.

You may have read about the man who sued a major beer company for false advertising that caused him emotional distress. Seems he drank the company’s beer, but was disappointed when the beautiful women and the tropical beach scenes pictured in the company’s ads didn’t appear when he drank the beer. Although the case was eventually dismissed, the beer company had to defend against the suit.

Professional Liability Errors & Omissions

This is an extreme example of a lawsuit. But every business owner has to be aware that what you do – or fail to do – in the course of your business every day could make you vulnerable to a professional liability lawsuit. Here are some real world examples of the kind of suits that professionals could face:

A homeowner sued his architect when a subcontractor went out of business midway through construction and the project was delayed.  A young couple sued their Realtor for failing to inform them that their new home needed an expensive new sewer system.  And a retiree sued his accountant for failing to file his income tax on time, even though the man did not provide the documents the accountant needed to prepare the tax return.

How can business owners protect against suits like this?

Professional liability insurance – what most people call Errors and Omissions insurance, can protect against claims like these. Errors and Omissions policies help protect professionals who give advice or provide services from bearing the full cost of defending against negligence claims by their clients.  Professional liability isn’t just for large corporations – small business liability insurance is a necessity for solo practitioners and smaller firms.

Do I need Errors and Omissions Insurance?

You should have Errors and Omissions insurance if you provide a professional service, if you dispense advice to your clients, and if any of your clients require that you carry professional liability insurance.  Remember, you may be sued even if you have done nothing wrong. Errors and Omissions insurance can help you protect your business in the event that a suit is filed against you.

What do I need to know before buying Errors and Omissions insurance?


First, be sure the policy spells out all the services you offer. If a lawsuit is filed, the Errors and Omissions insurance will only defend against claims that involve the services your policy lists.

Buying insurance is not a good time to be optimistic. Try to imagine the worst-case scenario that you might have to defend against, and make sure you have enough insurance to cover defense costs.

Finally, check the A.M. Best rating of any insurance company you are considering. A.M. Best is a global credit rating agency that ranks the financial strength and creditworthiness of insurance companies.

Where can I find Professional Liability Errors and Omissions insurance?

Business owners trust Peter Green Insurance Agency to advise them on this and other insurance matters.  Our staff can show you a number of Professional Liability Insurance policies with different terms and conditions, and help you select one that meets your specific requirements.  Let Peter Green’s experts help you protect your company.  Visit our website or give us a call today at 888.725.7776 or 714-258-2800.