How much does professional liability insurance cost

Find out how much professional liability insurance costs and what affects your premium.

Kim Mercado
By Kim Mercado
Published Apr 15, 2024
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Professional liability insurance is an important element of running a business because it can help protect you if you’re accused of making a professional error. Several factors will determine how much a company pays for this type of insurance coverage.

Continue reading to find out more about professional liability insurance costs and how to get the coverage you need for your small business without breaking the bank. You will get vital insights, such as:


How much does Professional Liability insurance cost?

NEXT offers customized Professional Liability business insurance that’s tailored to your line of work. It can cost as little as $19 monthly†, but the exact price you’ll pay depends on your particular circumstances.

Over half (55%) of our customers pay under $25 per month and 79% of customers pay $25 to $45 per month on professional liability insurance*. Here is the breakdown of what our customers pay for this type of coverage.

Monthly Professional Liability Insurance Costs
  • Monthly Professional Liability Insurance Costs
  • What is the cost of Professional Liability insurance for your profession?

    Here are the median monthly premiums of professional liability insurance in popular professions:

    ProfessionMedian cost
    Business consultant$81
    Carpet cleaner$53
    General contractor$30
    Insurance agent$25
    Interior designer$40
    Janitorial services$20
    Real estate agent$42
    Retail store$43

    What factors influence the cost of Professional Liability insurance?

    The price you’ll pay for professional liability insurance is determined by several factors, including:

    The type of work you do

    If you’re a yoga instructor, your insurance is likely going to cost less than an engineer because the nature of your work is inherently less risky.

    If your business involves offering people advice, your risks will probably be more than a business that doesn’t. In general, jobs that are more likely to result in business errors or accusations of negligence often have higher insurance costs.

    For example, the professional liability insurance cost for engineers, who could be accused of making a miscalculation in project plans and face more risks of making costly mistakes than many other professions, could be more expensive than for a yoga instructor who faces less risk.

    How many employees you have

    The professional liability insurance cost for consultants who work alone is likely going to be less than if you run a firm that employs seven consultants.

    If you have employees, many states legally require you to purchase workers’ compensation insurance to cover work-related injuries.

    The state where you work

    If you’re a small business owner in San Francisco you’re probably going to pay more for insurance than if you worked in a small town in Montana.

    This is partly due to different states having different regulations and partly because, as a general rule, the more populous the area, the more expensive your insurance rates will be.

    Your claims history

    Your record of losses and insurance claims has an impact on your insurance costs.

    For example, if you’re an accountant and you provide faulty tax advice, which results in a claim, you may see an increase in your premium at renewal time.

    How high you set your limits

    If you want to be covered for a greater extent of damage, you can select higher coverage limits on your insurance policy. Higher coverage limits will almost always increase the cost of your policy.

    Your work experience

    The number of years you’ve operated a business in your industry impacts your insurance rates.

    For example, if you’ve been a daycare owner for eight years with no claims, you will likely pay less than an actuary who’s been in business for two years because you have more experience in your field.

    These are only a few common factors that affect your costs. Insurance providers take into account many other factors, including external factors such as economic conditions and market trends.

    Note: It’s important to provide the most accurate information about your business when you get a quote for insurance to make sure you get the coverage that is right for you and any claims are processed without delays.

    How is a Professional Liability insurance premium calculated?

    An insurance premium is the amount you pay on a monthly or annual basis for your coverage. An insurance company calculates your premium by taking into consideration all of the factors listed above, as well as other factors such as the likelihood that you’ll make a claim and how many employees you have.

    NEXT customizes your coverage to fit your exact business needs. After you answer a few questions with our instant quote process, we’ll share options with pricing for your business.

    We operate entirely online to make the process streamlined and easy. You can get completely covered in a matter of minutes and licensed advisors are ready to help if you need them.

    How can you reduce Professional Liability insurance costs?

    You can take several steps that may reduce your insurance costs and lower your premium rates:

    1. Keep your risk level low

    A thorough understanding of the risks in your industry can help to limit the likelihood of filing insurance claims and raising your insurance costs.

    For example, you might:

    • Keep detailed notes and receipts about your work
    • Only accept work that you’re experienced enough to complete well
    • Develop a thorough training program for your employees
    • Create process checklists and reviews
    • Stay updated on recent industry news, innovation and current practices

    2. Learn from previous claims

    Analyze your previous claims and figure out what you could have done to avoid those risks.

    For instance, if you had a claim involving a client saying your employee missed important details, you could give him or her additional training and tighten up your quality control methods.

    3. Pick the right limits and deductible

    Lower limits will save you money, but you will have higher risks if you don’t get enough coverage. And if you choose a higher deductible, you will pay less for the policy (a deductible is the amount of money you pay before your insurance policy kicks in).

    4. Bundle more than one policy

    You automatically save 10% if you combine more than one type of policy together. For example, if you add a commercial auto policy to your existing general liability policy, you’ll save 10% right off the bat.

    How do I get a quote for Professional Liability business insurance?

    You can start an instant quote with NEXT to see if professional liability business insurance is right for you. We’ll ask you some basic questions about how you do business, which we’ll use to create a customized insurance quote.

    If you decide to purchase, you’ll be covered as soon as you’ve bought the insurance you want, and you’ll have access to your certificate of insurance.

    Getting insurance through NEXT can be done entirely without talking to an agent. If you do have questions, our licensed, U.S.-based insurance professionals are ready with the answers.

    Start a free instant quote today.

    Kim Mercado
    About the author
    Kim Mercado is a content editor at NEXT's blog, where she writes and edits posts for small business owners. She enjoys helping entrepreneurs solve their business challenges and learn about insurance. Kim has contributed to Salesforce, Samsara and Google.

    You can find Kim trying new recipes and cheering the 49ers.

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    This is the minimum cost of professional liability coverage for your business type and location. To determine eligibility and a final price, start a detailed quote.
    * The cost data presented here are based on NEXT active customers in the U.S. who purchased professional liability insurance over the previous 12 months. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in January 2024.
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    Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

    Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.