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Professional liability insurance

Professional Liability Insurance Costs

How much does Professional Liability insurance cost?

NEXT offers customized Professional liability insurance that’s tailored to your line of work. It can cost as little as $18.34 monthly or $220 annually, but the exact price you’ll pay depends on your particular circumstances.

 

What most of our customers pay for Professional Liability insurance

40% of our customers pay $26 to $45 per month on professional liability business insurance. Here is the breakdown of what our customers pay for this type of coverage.

Monthly Professional Liability insurance costs 

  • Under $25: 12% of customers
  • $26 to $45: 40% of customers
  • $46 to $75: 30% of customers
  • $76 to $100: 7% of customers
  • Over $100: 11% of customers

 

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 going to be 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 include 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 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 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 can expect to pay less than an actuary who’s been in business for two years because you have more experience in your field.

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.

 

What is the cost of Professional Liability insurance for your profession?

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

 

How do limits impact the cost of Professional Liability insurance?

A policy limit is the maximum amount of money an insurance company will pay. 

There are two types of limits in our professional liability policies: a limit per claim and an aggregate limit for all claims (which is one year). Once you’ve reached your limit, you’re responsible for paying whatever’s left over.

For example, let’s say you have a professional liability policy with a $1 million limit. You have a single claim that will cost $1.2 million. This means that you would have to pay $200,000 out of pocket. 

If you want to be covered for more exposure, you’ll need higher coverage limits on your insurance policy. Which means that you’ll also pay more for that policy. 

The majority of professional liability customers choose a policy with at least $1 million limits. 

The right amount of coverage for your business depends on your individual needs and how comfortable you are with your exposure to financial risks. 

 

How can you reduce Professional Liability insurance costs?

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

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 any employees
  • Create process checklists and reviews

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.

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).

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.

You can adjust the limits when you receive your quote. If you decide to purchase, you’ll be covered as soon as you’ve bought the insurance you want, and you’ll have instant access to your certificate of insurance. The self-service tools also allow you to pay premiums, add an additional insured and file claims.

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

Contact us if you’re unsure which type of coverage and limit amounts are right for your business.

Start a free instant quote today.

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Professional liability insurance