Professional liability vs E&O vs malpractice
Same family, different branding: E&O in insurance/finance/real estate, malpractice in medicine and law, professional liability everywhere else. The coverage logic is identical — financial harm from professional services — but policy forms differ in defense-cost treatment and exclusions.
- • Retroactive date matters: a gap in coverage can void old claims.
- • Independent-contractor work may not be covered — check the 'your work' definition.
- • Buy tail coverage when closing a practice.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How much is professional liability insurance for a small firm?
Roughly $900 per professional for low-risk fields (IT, marketing) up to $4,500+ for legal and healthcare-adjacent practices. A 5-person tech consultancy typically pays $4,000–6,000/year.
Do I need it if I have general liability?
Yes — GL covers bodily injury and property damage only. If a client loses money because your work was wrong or late, only professional liability responds.
What limit should I carry?
Match your largest contract requirement (often $1M) and your worst-case client loss. Firms serving enterprise clients commonly carry $2–5M.
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