Professional liability
(errors and omissions or E&o)

Professional Liability insurance is a form of insurance designed to protect professionals and professional organizations from financial loss from their negligence. Professional liability insurance is made up of four major segments:  professional liability (also called "errors and omissions", "E&O", or "malpractice"), directors & officers (D&O), employment practices liability (EPL) insurance and cyber risk insurance.  This page discusses the E&O segment, the segment of professional liability insurance which protects professionals, such as engineers, doctors, lawyers and insurance agents, from allegations of negligence.

Many different types of professionals hold themselves out to their clients as experts in a particular area. There is always a possibility that any professional's work may fail to meet their clients' expectations, resulting in a professional liability claim or lawsuit. Professional liability insurance is designed to protect the professional from the significant financial loss that can result from a lawsuit. Regardless of fault, litigation is costly, time consuming, and damaging to a reputation.

The exposures presented by professionals vary considerably. For example, the potential for a claim and the types of claims are very different for a doctor than for a marketing consultant. And the same holds true for different types of doctors, whether a primary care physician or an orthopedic surgeon.

In selecting and pricing professional risks, underwriters look at a variety of factors. These include the obvious ones, such as what does the professional does and who the clients are. Other factors include location, size of firm, professional education, loss experience and operating characteristics.

Because of these variables, professional liability policies vary and are offered by a wide range of insurers. Often, the best price, coverage and service option may be provided by a smaller specialty insurer rather than a well-known multi-lines insurer. Because of the specialty nature of the business, professional liability insurance is traditionally considered to be part of the specialty lines insurance market. In many cases, coverage is provided in the surplus lines insurance market rather than the admitted market.

Professional liability policies typically provide coverage for the cost of direct losses associated with situations involving professional liability. These policies also include defense costs, which can be quite substantial even if liability is not found. Policies typically do not provide coverage for non-financial losses or for intentional or dishonest acts, although there are exceptions to this. Professional liability policies are typically written on a claims-made basis.

General liability policies are quite different than professional liability policies. Do not depend upon general liability policies to provide protection from claims for professional negligence. Refer to our General Liability vs Professional Liability Insurance section for additional information on the differences between these coverages.

Since there are many different forms of professional liability insurance it is imperative that your policy be reviewed by you in order to ensure that you have the coverage your client expects, and that you involve a wholesale broker with the appropriate level of expertise.

Professionals of all types are being held to higher standards of conduct than in the past, and lawsuits without merit have grown considerably throughout the recent past. They are continually exposed to the possibility of claims being made against them for negligent acts, errors, or omissions in connection with the services they provide.

Tennant Risk Services is a wholesale broker providing professional liability for a wide variety of professionals.  We offer a broad portfolio of professional liability products, in many cases customized to meet the specific needs of a professional, financial institution or corporation.  Coverage is designed to provide protection for those situations where the company or an individual is alleged to have been negligent in performing their duties.


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Tennant Risk Services
124 LaSalle Road
West Hartford, CT 06107
Phone: (860) 519-1301
Fax: (860) 216-5845
E-Mail: info@tennant.com

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