Professional liability insurance, or errors and omissions insurance, is a crucial coverage for companies that provide professional advice and services and need protection from lawsuits alleging mistakes, omissions, or negligence in professional work. Your professional liability insurance requirements can vary widely depending on your industry and the types of risks you are exposed to, but there are a few salient features you’ll want to look for in an insurer. From financial stability to reliable customer service, there are a number of factors that impact the quality of coverage you’ll receive.
To determine the best professional liability insurance companies, AdvisorSmith considered a number of variables, including financial strength ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, available features and options, and availability of information and ease-of-use of the insurers’ websites. We scored insurers out of a total of five points and only included those companies that scored 4.0 or higher.
The Best Professional Liability Insurance Companies
|1||Chubb||5.0 / 5.0|
|2||The Hartford||4.9 / 5.0|
|3||Berkshire Hathaway Guard||4.5 / 5.0|
|4||Hiscox||4.5 / 5.0|
|5||Nationwide||4.5 / 5.0|
|6||State Farm||4.4 / 5.0|
|7||Zurich||4.3 / 5.0|
|8||Great American||4.3 / 5.0|
|9||Philadelphia Insurance Companies||4.3 / 5.0|
|10||AIG||4.2 / 5.0|
|11||Progressive Commercial||4.2 / 5.0|
|12||Travelers Insurance||4.1 / 5.0|
|13||AXA XL||4.1 / 5.0|
|14||Axis||4.0 / 5.0|
|15||Admiral Insurance||4.0 / 5.0|
|16||Arch Insurance||4.0 / 5.0|
*Not all insurance companies provide coverage in all states.
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AdvisorSmith found and rated the top professional liability insurance companies on a five-point scale, based on financial strength, customer satisfaction, ease-of-use, and a number of other factors. While many insurers were evaluated, only those with a score of 4.5 or more are listed below.
5.0 / 5.0
Chubb has an A++ rating from AM Best and an AA rating from Standard & Poor’s, indicating excellent financial strength, and the company was also highly rated in customer satisfaction by J.D. Power. Chubb’s professional liability insurance policies cover a variety of professions, including media, technology, financial institutions, architects, engineers, lawyers, and public entities. Chubb’s policies can be tailored to fit individual businesses, and the company offers broad definitions of wrongful acts, damages, and insureds.
Chubb offers online quotes, online claims support, and online account management. The company offers admitted coverage in most states.
4.9 / 5.0
The Hartford has been given an A+ rating by both AM Best and Standard & Poor’s, indicating a high level of financial strength. The company has high ratings from several J.D. Power surveys of commercial insurance. The Hartford offers professional liability insurance for many industries, including accountants, consultants, market research firms, interior designers, advertising agencies, graphic designers, technology companies, and more.
The Hartford offers online quotes, online claims management, and information and scenarios for small business owners. Specialists can help you secure appropriate coverage for your business and help you deal with any claims that arise. Policies may include personal injury coverage, subpoena support, and lost income coverage for time spent in trials or depositions.
4.5 / 5.0
Berkshire Hathaway GUARD has an AM Best rating of A+, meaning it is financially very strong, and the company has also been highly rated in customer satisfaction. The company offers professional liability coverage for many industries, including lawyers, accountants, bookkeepers, architects, engineers, printers and publishers, consultants, interior designers, funeral services, photographers, and more.
Berkshire Hathaway GUARD offers convenient online quotes, online claims, and policy management through its website and mobile app. Claim reporting is available 24/7, and specialized litigation and fraud units can assist with claims. Prior acts coverage is available, and policies may be written with separate limits for defense expenses and claims expenses. Personal injury coverage may be included in some policies.
4.5 / 5.0
Hiscox received A ratings from both AM Best and Standard & Poor’s, meaning it has a very strong capacity to meet its financial obligations. Hiscox offers online quotes for its professional liability insurance, and 24/7 claims service is available. The company offers worldwide coverage for claims as long as lawsuits are filed in the U.S. or Canada. Coverage includes temporary and contract workers. Policies may include personal injury coverage.
Since clients may require you to have professional liability insurance as part of a contract, Hiscox can provide a certificate of coverage online immediately after you purchase a policy. Discounts may be available for companies with certain risk management practices and for those that buy more than one Hiscox policy.
4.5 / 5.0
Nationwide received A+ ratings from both AM Best and Standard & Poor’s, indicating that it is financially strong. The company focuses its professional liability coverage offerings on contractors in the building trade, such as plumbers, HVAC technicians, electricians, and sheet metal workers. Coverage is also available for consultants and personal care businesses such as salons and barber shops.
Nationwide offers online quotes for professional liability insurance, and claims can be managed online as well. Customers have access to online resources for small businesses and loss control services.
Brokers for Professional Liability Insurance
Professional liability insurance is highly tailored to the industry your business is in and your unique individual risks. As such, it may make sense to work with a trustworthy insurance broker who can help you find the coverage that suits your business’s needs and also provide you with quotes from multiple insurers. Below, we’ve highlighted a few of the top brokers that offer professional liability insurance.
CoverageSmith is a leading online broker specializing in insurance for small businesses. The company provides a modern, tech-enabled solution for businesses, allowing them to quickly get the insurance they need, completely online, from some of the most trusted insurance carriers in the world, including Chubb, The Hartford, AIG, and CNA.
CoverWallet is an online broker backed by Aon, an insurer with an A rating from AM Best. The company provides online quotes, assessments to help you understand what types of insurance your business needs, and online claims processes.
CoverWallet uses a customized application and algorithms to help you get the insurance you need without irrelevant questions. The company also provides resources to help businesses understand the risks they may face.
Embroker is an online broker offering online quotes, online claims, and 24-hour assistance via chat, email, or phone. A personal account manager can help with insurance needs and assist you in getting the right professional liability insurance for your business. Embroker does not require you to provide equity, ownership, or financial statements, making it simple to apply for coverage. Policies can be tailored to individual needs, with the option to choose your own deductibles and limits.
Embroker is backed by Munich Re, a financially strong insurer with an A+ rating from AM Best and an AA- rating from Standard & Poor’s.
Thimble is backed by Markel Insurance Company, an established insurer known for its focus on small business coverage and strong financial footing, with A ratings from both AM Best and Standard & Poor’s. Thimble is known for offering flexible policies for small business owners that can be purchased by the job, month, or year.
How much does professional liability insurance cost?
AdvisorSmith found that the average cost of professional liability insurance for small businesses is $1,034 per year. This average is based upon small businesses with under $500,000 in revenue, with limits of $1 million.
The cost of professional liability insurance is highly dependent upon company revenue and line of business. For example, a new IT consulting business with $50,000 in sales may have average premiums as low as $310, while an architecture business with $250,000 in revenue may have average premiums of $2,457 or more.
What does professional liability insurance cover?
Professional liability insurance protects individuals and companies from the costs of lawsuits and damages related to their professional advice and services. This insurance protects individuals and businesses that sell their expertise. It covers professionals who have gained expertise through extensive training in their field and whose work is governed by standards set by client agreements, their industry, or the government.
Professional liability insurance covers a variety of claims against the professional work or services you provide. These include lawsuits arising from:
- Work errors or mistakes
- Failure to do what was promised
- Undelivered or uncompleted work
- Acutal or alleged negligence
- Violation of good faith and fair dealing
- Inaccurate advice
Professional liability insurance covers you, your business, your employees, and independent contractors while they are working for your business. It will pay for any judgments against your business, as well as the costs of your legal defense, whether or not your business is found to be at fault. It’s important to note that, unlike most liability insurance, legal defense costs are counted as part of your limits of coverage.
For certain professions and businesses, professional liability insurance may be required, either contractually or by law. For professions in law and medicine, this type of coverage is legally required. It’s also worth noting that coverage may vary depending on the profession being covered. While professional liability policies generally exclude bodily injury and property damage, bodily injury is typically included in professional liability for medical professionals, and both bodily injury and property damage are generally covered for architects and engineers. It’s best to consult with your insurer, as coverage is usually tailored to the profession.
In order to determine the best professional liability insurance providers, AdvisorSmith reviewed several factors to ensure you select the best coverage for your business. The top factors include an insurer’s financial strength, customer satisfaction, and ease-of-use. AdvisorSmith determined these factors have the greatest impact when selecting professional liability insurance coverage.
An insurer’s financial strength is important as it is a measure of the company’s ability to pay for claims made. We reviewed the carrier ratings given to each insurer by independent rating agencies including A.M. Best and Standard & Poor’s. These agencies rate insurers on their financial stability which is based on factors such as operating performance, balance sheet strength, and business profile.
We also looked at customer satisfaction ratings for each insurer to get feedback directly from policyholders on their experience working with the company. These ratings are important as they give you an idea of what it is like to actually work with the insurer and file a claim. We reviewed customer satisfaction ratings from J.D. Power and the National Association of Insurance Commissioners (NAIC).
Finally, AdvisorSmith assessed each insurer’s online platform and customer support to get a sense of how easy it is to use their website and contact customer service. We believe that an insurer should have a user-friendly online platform where you can easily get a quote, purchase a policy, and file a claim. We also think it is important to have multiple channels of customer support so that you can reach them in the way that is most convenient for you.
Using our own proprietary scoring algorithm, we weighted each component based upon what we believe to be important for small and midsize business owners. Our algorithm outputted a score out of five total points. While we considered a number of insurers, we only included in this article those companies that scored 4.0 or higher.
The AdvisorSmith rankings are based upon our editorial team’s quantitative and qualitative analysis, and they are intended to serve only as a guide for our readers. We encourage our readers to conduct their own research when selecting an insurer, shop and compare quotes, and make a decision based on their own unique business needs.
AdvisorSmith is in no way compensated for any of our reviews.