What is Professional Liability insurance coverage?
Professional liability insurance can help protect Washington business owners if they are held responsible for professional mistakes or face accusations of negligence or wrongdoing.
Professional liability insurance can help cover:
- Business mistakes that financially harm another person or company
- Accusations of professional wrongdoing or inaction
- Misrepresentation of services
Whether you made a professional error or a client claims that you did, you could get help covering related costs with professional liability insurance. Washington state businesses may be able to submit a claim in various situations, such as:
- A client sues a Seattle accountant for making a mistake in their paperwork that led to the client losing out on significant tax advantages and paying more than they had to. The accountant’s professional liability insurance can help cover costs that result from the error.
- An insurance agent in Spokane does nothing wrong, but a former client sues them for misrepresenting the coverage on a policy after their claim is denied. The costs to establish a legal defense to get the case dismissed are significant. However, professional liability insurance could help with legal costs if the insurance agent needs to defend their business.
What is the difference between Professional Liability and E&O insurance?
Another common name for professional liability insurance is errors and omissions or E&O insurance. Washington state businesses may use these terms interchangeably as they usually provide the same coverage.
Errors and omissions insurance is the term used mainly by insurance agents and real estate professionals. There is also a separate contractor’s E&O option for construction professionals.
In most other professions, this insurance is called professional liability. For example, lawyers looking for professional liability insurance for law firms in Washington would probably not call the insurance E&O.
Other industries that call this type of insurance professional liability include architects, engineers and accountants.
Is Professional Liability insurance required in Washington state?
Most Washington state businesses are not required to carry professional liability insurance. Nevertheless, entrepreneurs and professionals may need this business insurance to comply with industry standards.
For example, healthcare providers often need malpractice insurance, a type of professional liability coverage, to work in medical facilities. Also, if you work on state or local government contracts in Washington, you may need professional liability or E&O insurance.
Even when it’s not required, professional liability insurance may offer the following benefits for business owners:
Financial protection
Small businesses in Washington with professional liability insurance may be better protected from related costs if they make a business mistake or are accused of negligence or wrongdoing.
Licenses and permits
The city or county where you work may require professional liability insurance to obtain or renew certain business licenses, permits or certifications.
Work contracts
Depending on your industry, it may be common for clients to require a certificate of insurance before agreeing to work with you. Without E&O or professional liability insurance, you may risk losing out on potentially lucrative jobs.
For example, professional liability insurance for attorneys in Washington is not mandated. But there is a malpractice insurance disclosure requirement where lawyers must inform clients if they do not meet the minimum levels of this professional liability coverage. Lawyers in Washington need malpractice insurance for $100,000 per occurrence and $300,000 in the aggregate or must provide written notice that they do not meet this requirement.1
What types of businesses might need Professional Liability in Washington?
Professional liability insurance is considered common coverage for professional services in many occupations, such as accounting, consulting, construction and healthcare.
However, professionals in many industries can benefit from this Washington state business insurance.
Many business owners and employees risk making a mistake that could cause financial harm or facing accusations of negligence. With professional liability coverage, you may be able to submit a claim to help resolve these issues quickly and protect your company’s reputation.
For instance, if a client sues a Tacoma interior designer for using copyrighted material in their advertisements, professional liability coverage could help cover costs related to defending themselves.
Or a prospective customer might file a discrimination lawsuit accusing a Kent real estate agent of steering them away from one of their listings, claiming that the agent violated the Fair Housing Act. Professional liability insurance could help cover the costs for the agent to defend themselves.
How much is Professional Liability insurance in Washington?
The price of Washington professional liability insurance can vary based on several factors, including:
- The type of work you do
- Your work experience
- How many employees you have
- The locations where you do business
- Your insurance claims history
- How high you set your policy limits
NEXT makes getting affordable Washington professional liability or E&O insurance easy. You can apply online in about 10 minutes, and our monthly premiums for this type of business insurance cost $45 or less for 52% of our U.S. customers.**
Learn more about professional liability insurance costs.
How NEXT Insurance helps Washington businesses
NEXT provides professional liability insurance policies for Washington small business owners and self-employed workers.
It only takes about 10 minutes to get a quote, review your coverage options, choose your policies and download a certificate of insurance.
Start an instant quote online today.
Our team of licensed insurance advisors is standing by to assist you if you have any questions along the way.
