Errors and Omissions Coverage for California Businesses
Professional liability insurance, also known as errors and omissions or E&O insurance, may help protect an eligible business from certain claims alleging that its professional advice or services caused a client financial loss.
Jose Estrada helps eligible California businesses explore professional liability coverage based on their services, contracts, revenue, experience, and claims history. Assistance is available in English and Spanish.
What Professional Liability Insurance May Cover
Depending on the policy, professional liability insurance may respond to covered allegations involving:
- Professional negligence
- Errors or omissions
- Failure to provide promised services
- Inaccurate advice or information
- Misrepresentation
- Missed deadlines
- Certain breaches of professional duty
- Legal defense costs
- Settlements or judgments for covered claims
Coverage depends on the policy language, limits, deductible or retention, exclusions, retroactive date, and reporting requirements.
Professional Liability Versus General Liability
General liability insurance primarily addresses certain third-party bodily injury, property damage, and personal or advertising injury claims.
Professional liability insurance focuses on claims arising from professional services, advice, recommendations, or failure to perform those services as expected.
A business may need both policies because they protect against different exposures.
Claims-Made Coverage
Many professional liability policies are written on a claims-made basis. This generally means that the claim must be made and reported during the active policy period or an applicable extended reporting period.
Maintaining continuous coverage can be important. Canceling or allowing a claims-made policy to lapse may affect coverage for work performed in the past.
Retroactive Dates and Prior Acts
A claims-made policy may include a retroactive date. Professional services performed before that date may not be covered.
Prior-acts coverage may be available when the business has maintained continuous insurance and meets the carrier’s underwriting requirements. The retroactive date should be reviewed carefully when replacing an existing policy.
Extended Reporting Coverage
An extended reporting period is sometimes called tail coverage. It may allow certain claims to be reported after a claims-made policy ends, provided the underlying professional services occurred during the covered period and after any applicable retroactive date.
An extended reporting period generally does not cover new work performed after the policy terminates.
What Professional Liability Usually Does Not Cover
Professional liability insurance may exclude or limit:
- Intentional, fraudulent, or criminal acts
- Known claims or circumstances
- Bodily injury or property damage
- Employment-related claims
- Workers’ compensation claims
- Automobile accidents
- Cyber incidents or data breaches
- Guarantees of results
- Unpaid fees or collection disputes
- Services outside the policy’s description
- Claims reported after required deadlines
Separate policies may be needed for other business exposures.
Businesses That May Need Professional Liability
Professional liability coverage may be available for eligible:
- Consultants
- Bookkeepers
- Technology-service providers
- Marketing professionals
- Designers
- Property managers
- Business-service providers
- Administrative-service companies
- Training and educational consultants
- Other businesses providing professional advice or services
Some professions require specialized malpractice or professional liability programs. Eligibility depends on the services provided and carrier underwriting.
Information Needed for a Quote
Information requested may include:
- Legal business name and DBA
- Description of professional services
- Years of experience
- Annual revenue
- Largest client or contract
- Client industries
- Sample contracts
- Current insurance
- Existing retroactive date
- Claims history
- Known circumstances that could result in a claim
- Desired limits and deductible
- Use of subcontractors
Complete and accurate information is important when applying for claims-made coverage.
Request a California Professional Liability Insurance Quote
Tell us about your business, professional services, clients, contracts, revenue, and current insurance. We will contact you to gather additional information and discuss available professional liability options.
Submitting an inquiry does not bind, change, or provide insurance coverage. Do not cancel existing insurance until replacement coverage has been confirmed in writing.
Frequently Asked Questions
Is professional liability the same as errors and omissions insurance?
The terms are often used interchangeably. Certain industries may use specialized names such as malpractice insurance, but the policy language and coverage vary by profession and carrier.
Is professional liability the same as general liability?
No. General liability primarily addresses certain bodily injury, property damage, and personal or advertising injury claims. Professional liability focuses on claims arising from professional advice or services.
Who needs professional liability insurance?
Businesses that provide advice, consulting, designs, recommendations, technical services, or other professional services may benefit from professional liability coverage. Clients or contracts may also require it.
Is professional liability insurance required in California?
California does not generally require every business to carry professional liability insurance. However, certain professions, contracts, clients, licensing requirements, or business relationships may require coverage.
What is a claims-made policy?
A claims-made policy generally requires a claim to be made and reported while the policy or an applicable extended reporting period is active. The exact reporting requirements are stated in the policy.
What is a retroactive date?
The retroactive date limits how far back covered professional services may have occurred. Work performed before that date is generally not covered.
What is prior-acts coverage?
Prior-acts coverage may protect eligible professional services performed before the current policy began, but after the applicable retroactive date. Availability depends on continuous coverage and carrier approval.
What is tail coverage?
Tail coverage, or an extended reporting period, may provide additional time to report certain claims after a claims-made policy ends. It generally does not cover new services performed after termination.
Are legal defense costs included?
Professional liability policies may cover legal defense costs for covered claims. Depending on the policy, defense expenses may reduce the available policy limit.
Does professional liability cover subcontractors?
Coverage for work performed by subcontractors varies. Some policies may provide limited coverage for the business’s liability, while subcontractors may still need their own insurance.
Does professional liability cover cyber incidents?
Cyber incidents and data breaches may require separate cyber liability coverage. Some professional liability policies offer limited cyber coverage, but the terms should be reviewed carefully.
How much does professional liability insurance cost?
Pricing depends on the services provided, annual revenue, experience, clients, contracts, limits, deductible, claims history, retroactive date, and carrier underwriting.
Can I obtain a certificate of insurance?
After qualifying coverage has been issued, a certificate of insurance can generally be provided as evidence of coverage. A certificate does not change or expand the policy.
Is assistance available in Spanish?
Yes. Se habla español. California businesses may request assistance in English or Spanish.
Does submitting the form activate coverage?
No. Submitting an inquiry or receiving a quote does not bind or activate insurance. Coverage begins only after all carrier requirements are satisfied and binding or issuance has been confirmed.