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.
With professional liability insurance, Michigan business owners can help protect their company if they or one of their employees makes a professional mistake or faces an accusation of negligence.
This type of business insurance can help cover:
Professional liability insurance may help cover costs related to various situations, whether or not you actually made the error your client claims that you did. For example:
Professional liability insurance is also called errors and omissions insurance, or E&O.
These terms may be used interchangeably and typically refer to the same coverage. The main difference is that the term professional liability is preferred in some industries, while in others, this coverage is called errors and omissions insurance. Michigan property managers, real estate agents and insurance agents primarily use E&O, and there is also a contractor’s E&O option for construction professionals.
Most other professionals, including architects, engineers, lawyers and accountants, refer to this insurance coverage as professional liability.
Most businesses in the state are not required by law to carry Michigan professional liability insurance. However, professionals may need this coverage to comply with standards in certain industries.
For example, if you’re a health care provider, your employer might require you to carry malpractice insurance, a type of professional liability insurance. Or, if you would like to work on Michigan state or local government projects, you may need professional liability insurance to secure a contract.
Professional liability insurance coverage can be valuable for Michigan businesses, even when it’s not required. Business owners in the state often choose this coverage for the following reasons:
With professional liability insurance, Michigan small businesses may be better financially protected if they’re accused of professional negligence or make a business mistake.
Depending on your industry and where you work, professional liability insurance may be required to obtain or renew certain business licenses or certifications.
A certificate of insurance may be required before a client agrees to sign a contract to work with you. You may even risk losing out on potentially lucrative jobs without professional liability insurance.
For example, architects working on new construction or renovation projects for the Michigan State Housing Development Authority (MSHDA) must have E&O insurance coverage equal to 10% of the construction contract amount or $1,000,000, whichever is greater.1
Professionals such as accountants, real estate agents and business consultants rely on professional liability as common coverage for professional services.
Businesses operating in these or many other industries can benefit from this type of Michigan business insurance.
Most businesses offering professional services risk making a mistake that could cost someone money or facing accusations of negligence or wrongdoing. Having professional liability insurance in Michigan may help resolve these issues quickly so you can protect your company’s reputation and avoid client confrontations.
For instance, say a financial advisor’s client in Ann Arbor sues them for using copyrighted material in their advertisements. Professional liability insurance could help cover these defense costs.
Or suppose a client discovers that a Lansing architect made critical measuring mistakes in their blueprints, causing project costs and timelines to double, and they sue for financial losses. In that case, professional liability insurance could help cover costs for redoing the job and legal fees.
Several factors can affect the cost of Michigan professional liability insurance, including:
With NEXT Insurance, it’s easy to get affordable Michigan errors and omissions or professional liability insurance online in approximately 10 minutes. Our monthly premiums for this type of business insurance 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 Michigan 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.
Michigan general liability insurance may help protect your business from accidents and mistakes common in your industry. General liability coverage can help cover damages if your company is blamed for causing third-party injuries or property damage.
Workers’ compensation insurance is an important type of coverage that can help cover lost wages and medical expenses if an employee gets hurt on the job. In Michigan, all companies with at least one full-time employee or three or more total employees must have workers’ comp insurance.2
Commercial auto insurance can help cover medical expenses, property damage and other related expenses if you or an employee gets into an accident while driving a work vehicle.
In Michigan, all vehicles are required to have minimum auto insurance coverage of $20,000 per person, $40,000 per accident and $10,000 for property damage.3
Commercial property insurance can help businesses protect physical assets such as buildings, furniture and inventory. This coverage can help pay for repairs or replacements after your property is damaged by a covered event, such as an electrical fire or burst pipe.
Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.