General liability covers the injury. It does not cover the mistake.
Professional liability – errors and omissions – responds when your advice, design or service causes a client financial loss. If you are sued for a missed deadline, a flawed recommendation or work that did not perform, your general liability policy will not answer.
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What this coverage includes
- Defense costs, which often exceed the settlement
- Claims of negligent advice or service
- Errors, omissions and missed deadlines
- Failure to deliver a promised professional standard
- Prior acts coverage back to your retroactive date
Who needs E&O in Texas
Consultants, accountants, engineers, architects, IT and software firms, marketing agencies, real estate professionals, insurance and financial advisors, and any business whose product is judgment rather than goods. Many client contracts now require it with a $1M limit before work starts.
Claims-made policies and the retroactive date
Nearly all E&O is claims-made: it pays only if the policy is active when the claim is reported. Let it lapse and years of past work go uncovered. Switching carriers without carrying your retroactive date forward does the same damage. This is the single most expensive mistake we see, and we check it on every renewal.
E&O and cyber overlap
A technology or professional firm usually needs both. E&O responds to the service failure, cyber responds to the data breach. See cyber liability insurance.
Contract requirements and limits
Client contracts increasingly specify a limit, a maximum deductible, and additional insured or waiver-of-subrogation language. Signing a contract your policy cannot satisfy is a claim waiting to happen.
Send us the insurance section of the contract before you sign it. We will tell you whether your current policy meets it and what it costs to bring it up.
Watch the deductible structure. Some E&O policies apply the deductible to defense costs, some do not, and defense is where most of the money goes on a professional liability claim.
If you are winding down a business or retiring, buy extended reporting – tail coverage. Without it, claims filed after the policy ends for work you did while it was active are simply uncovered.
Frequently asked questions
How much does professional liability cost in Texas?
Small firms commonly pay $600-$3,000 a year for a $1M limit, driven by revenue, profession and claims history.
Is E&O the same as malpractice?
Same concept, different name by industry – medical and legal professions typically call it malpractice.
Does general liability include E&O?
No. They cover different things and are usually separate policies.
Get a professional liability quote
BenefitExcel is an independent agency in Corpus Christi. We shop multiple carriers on your behalf instead of selling one company’s product, and we review every renewal so you are not quietly paying more each year. Request a quote or call (361) 808-4988.