A client or customer accuses you of making a professional mistake that costs them money.
Someone claims your inaction or wrongdoing caused a financial loss or personal harm.
Someone accuses you of misrepresenting information with your services.
You need to hire a lawyer to defend your business after you are accused of making a professional mistake.
Professional liability insurance can help protect California business owners and their employees if they are held responsible for business mistakes or face accusations of negligence.
This insurance can help cover:
Professional liability insurance can help cover related costs in various situations, whether you actually made an error or a client claims that you did. For example:
Professional liability insurance is sometimes known as errors and omissions insurance, or E&O.
The terms are often used interchangeably and usually provide the same coverage; it just depends on the industry. E&O is used primarily for real estate agents, property managers and insurance agents. There’s also a specific contractor’s E&O option for construction professionals.
Most other industries refer to this insurance as professional liability, including lawyers, accountants, architects and engineers.
Professional liability insurance is not required for most businesses in California. However, coverage may be required to comply with certain industry standards.
For instance, if you work on California state or local government contracts, you may be required to have professional liability coverage. Or, if you are a healthcare provider, your employer may require you to have malpractice insurance, a type of professional liability coverage.
Even when it’s not required, having professional liability insurance can be beneficial. California business owners often get this coverage for the following reasons:
California small businesses with professional liability coverage may be better protected financially if they make a professional mistake or are accused of negligence.
Clients may require a certificate of insurance before signing a contract to work with you, especially on high-cost projects. Without professional liability or E&O insurance, you may lose out on potential jobs.
Professional liability insurance could be required in the city where you work or for certain business licenses and certifications.
For example, mental health providers in Fresno County must have professional liability insurance with minimum coverage of $1 million per occurrence with a $3 million annual aggregate.1
Professional liability is common coverage for professional services, such as accountants, consultants and real estate professionals.
However, many industries can benefit from this type of California business insurance.
Many businesses run the risk of making a mistake that costs someone money or could potentially face accusations of negligence or wrongdoing. Professional liability insurance can help resolve these issues quickly so you can avoid customer confrontations and protect your reputation.
For example, if an accountant in San Diego is accused of making a mistake that caused a client to lose out on significant tax advantages, professional liability insurance could help cover related expenses to defend themselves.
Similarly, if a property manager accuses a San Jose painter of painting a building with the wrong color, contractor’s E&O insurance can help cover the costs to redo the job or defend against the accusation.
The cost of professional liability insurance can vary depending on a variety of factors, including:
NEXT makes it easy to get affordable California errors and omissions insurance or professional liability insurance online in about 10 minutes. Monthly premiums for this type of business insurance policy cost $45 or less for 52% of our U.S. customers.**
Learn more about professional liability insurance costs.
NEXT provides professional liability insurance policies for California small business owners and self-employed workers.
It only takes about 10 minutes to get a quote, review your coverage options, choose your policies and download a certificate of insurance.
Start an instant quote online today.
Our team of licensed insurance advisors is standing by to assist you if you have any questions along the way.
California general liability insurance can help protect your business from common mistakes or accidents in your industry. This insurance can help pay for damages if someone blames your company for causing injury or destroying property.
Workers’ compensation insurance can help provide important coverage for medical expenses and lost wages if an employee gets hurt on the job. All employers in California are required to carry workers’ comp insurance.2
Commercial auto insurance can help cover related costs like medical expenses and property damage if you or an employee are involved in an accident while driving a work vehicle.
The state of California requires all vehicles to have minimum auto insurance coverage of $15,000 per person, $30,000 per accident and $5,000 for property damage.3
California commercial property insurance can help protect business equipment, inventory, furniture and commercial structures used by business owners. This insurance can help pay for repairs or replacements if your business property is damaged due to a covered event, such as a burst water pipe or fire.
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.