Professional Liability / E&O Insurance
Covers claims when your work, your advice, or your product causes a client financial harm. The key is making sure the policy definition matches what you actually do.
What it covers
- Mistakes and oversights. You miss a deadline, deliver work that doesn't meet spec, or make an error that costs your client money.
- Bad advice. A client follows your professional recommendation and it causes them financial harm.
- Service failures. Your service goes down, a project falls through, or the work product doesn't perform as promised.
- Intellectual property claims. Someone alleges your work infringes on their patent, copyright, or trade secret.
- Data loss. Your work causes a client to lose or corrupt their data.
The definition problem
Every E&O policy defines what "professional services" means. That definition controls what's covered. If it doesn't match what your business actually does, the policy won't pay when you need it to.
Most brokers don't check. They submit the application, get a quote, and never read the definition. I use AI to compare your policy definition against your actual operations and flag the mismatches.
How this goes wrong:
- A consulting firm that also does implementation work. Policy covers "consulting and advisory services." Carrier argues implementation isn't advisory. Claim disputed.
- An IT firm that does security monitoring. Policy covers "IT support and maintenance." Carrier argues security monitoring is a different service. Not covered.
- A contractor who gives design advice. Policy covers "construction services." The design recommendation that caused the problem? Not covered.
Who needs E&O
Any business that provides professional services, advice, or specialized work to clients. Consultants, IT firms, accountants, architects, engineers, marketing agencies, software companies, financial advisors -- if clients pay you for your expertise and something goes wrong, E&O is what protects you.