Professional Liability Insurance

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Professional liability Insurance (PLI), or professional indemnity insurance (PII), commonly known as errors & omissions (E&O) in the US.

What is Professional Liability Insurance?

Professional Liability Insurance is a coverage that protects professionals such as engineers, accountants, lawyers and physicians against negligence and other claims initiated by their clients.

In other words Professional Liability Insurance is a form of liability insurance that helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit.

You May Read: Contractors Professional Liability Insurance

Professional Liability Insurance is required by professionals who are expertise in a specific area since general liability insurance policies do not offer coverages against claims arising out of business or professional practices such as negligence, misrepresentation or malpractice

Professional Indemnity Insurance

Professional indemnity insurance is a coverage that protects

you in the event a client is harmed from a service or advice

that you provide for which you are held legally liable.


The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder.

These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm. Professional liability coverage may also provides for the defense costs, including when legal action turns out to be groundless.
Nevertheless, Coverage does not include criminal prosecution, nor a wide range of potential liabilities under civil law that are not enumerated in the policy, but which may be subject to other forms of insurance.

You May Read: Contractors' All Risks (CAR) Insurance

In some areas professional liability insurance is required by law for certain kinds of professional practice (especially medical and legal), and is also sometimes required under contract by other businesses that are the beneficiaries of the advice or service.

Examples of Professional liability insurance

Professional liability insurance are name base on the profession. For example, in reference to medical professions it is called malpractice insurance, while errors and omissions (E&O) insurance is used by insurance agents, consultants, brokers and lawyers.
Still the same in engineering, accounting and financial services, construction and maintenance; contractors, plumbers, etc., they go for Professional liability insurance also.

You May Read: what is liability insurance


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