Compare Professional Liability Insurance Quotes

What is professional liability insurance?

Business owners have a professional obligation to deliver products and services as promised. If that promise isn’t met, they could face legal consequences. Professional liability insurance, also known as errors and omissions insurance, can provide financial protection against these claims.

What does professional liability insurance cover?

Professional liability insurance helps cover legal costs and damages resulting from claims or lawsuits alleging negligence or failure to provide a service as promised.

Policies typically cover legal costs and damages for:

• Professional services: Protection against claims arising from negligent acts, errors, omissions or failure to deliver services as agreed.
   
• Media and advertising: Coverage for media services that lead to lawsuits against your client for defamation, libel or slander.

Is professional liability insurance mandatory in Canada?

While professional liability insurance is not mandatory in Canada, it can be high risk for some professionals to operate without it, such as ​​doctors and lawyers. So much so that some professional regulatory bodies will require their members to purchase​ it.

If you’re a small business owner or a solopreneur (an entrepreneur who works alone) who contracts your services to other businesses, it can provide protection against unsatisfied customers.

What does professional liability insurance cover?

Professional liability insurance helps cover legal costs and damages resulting from claims or lawsuits alleging negligence or failure to provide a service as promised.

Policies typically cover legal costs and damages for:

• Professional services: Protection against claims arising from negligent acts, errors, omissions or failure to deliver services as agreed.
   
• Media and advertising: Coverage for media services that lead to lawsuits against your client for defamation, libel or slander.

Is professional liability insurance mandatory in Canada?

While professional liability insurance is not mandatory in Canada, it can be high risk for some professionals to operate without it, such as ​​doctors and lawyers. So much so that some professional regulatory bodies will require their members to purchase​ it.

If you’re a small business owner or a solopreneur (an entrepreneur who works alone) who contracts your services to other businesses, it can provide protection against unsatisfied customers.

Who needs professional liability insurance?

Any small business owner who charges for their advice or services needs professional liability insurance in Canada. The same goes for professionals who develop and sell products for customers.

Some professionals who benefit the most from professional​​ liability insurance include​​:

• Consultants: Freelance professionals offering advice and services can be exposed to claims if clients allege financial loss.
   
• Health providers: Doctors and dentists have their clients’ lives in their hands. One wrong move could lead to claims of negligence or errors in treatment.
   
• Financial professionals: Accountants, brokers and financial advisors handle large sums of money for clients. They could be exposed to claims over financial loss.
   
• Real estate agents: These professionals manage private client information and manage expensive property transactions. Any contractual errors, misrepresentation or omission of important information could harm their small business.

What is not covered by professional liability insurance?

Take note, professional liability insurance was not created to protect small business owners from their own bad behaviour.

This type of insurance won’t cover criminal acts, dishonestly or fraud. Nor will it cover any violation of cost guarantees or price estimates, or mistakes made when projecting profits or economic returns.

How much does professional liability insurance cost?

The cost of professional liability insurance will depend on your industry and the types of products and services that you offer. Other factors include your number of employees, yearly earnings and years of experience.

The most basic type of insurance starts at around $250 per year for about $100,000 worth of coverage. For some businesses, that won’t be nearly enough.

Factors that affect your professional liability insurance rates

The professional liability insurance quote you receive will depend on a multitude of factors. But essentially, the more risk your business takes on, the higher your premium will likely be.

Here are some key factors:

• Industry type: Some industries, like healthcare, have more expensive risk factors than others.
   
• Business size and earnings: The bigger the business, the more liabilities they may face.
   
• Past claims: Previous claims may increase your premium.
   
• Experience: Insurance companies may lower premiums for experienced professionals because they’re safer bets.
   
• Number of employees: Professional liability coverage will need to account for your employees.
   
• The amount of coverage: If you need a few millions of dollars of liability protection, it will cost more than a plan with a lower policy limit.

Speaking with an insurance professional or using an online comparison platform can help you estimate a professional liability insurance quote based on your small business.

How to get the cheapest professional liability insurance quotes

Getting the best professional liability insurance quote is possible. Follow these tips to get the best rate.

Compare quotes: Insurance providers each have their own formulas for calculating premiums, so it’s important to shop around and compare offers to find the best rate for your small business.

Bundle products: Similar to how telecom companies offer discounts for bundling services, insurance companies may provide better deals when you combine multiple commercial insurance products.

Consider annual premiums: Paying your premiums annually instead of monthly can sometimes result in lower overall cost, as it secures your commitment for a longer period. Be sure to ask about available payment options and terms.

How professional liability can protect your business

Here are three different examples of how small businesses can benefit from professional liability insurance.

1) It can cover legal expenses if you're sued

Bobby has been in advertising for nearly 25 years and has finally struck out on his own.  When his ad campaign for a popular shoe brand launches, it doesn’t provide the company with the return-on-investment as promised. Without protection Bob would have to handle any lawsuit expenses himself. But, since he is covered, the legal expenses and settlement coverage portion of his policy covers the ensuing expenses. 

2) It can help you handle legal settlements efficiently

Sandra provides accounting services to construction companies. While inputting and calculating a client’s financial information, she makes an error that leads a client to pay much more than expected. Her client sues for negligence. Thankfully, she has professional liability insurance. The legal expenses and settlement coverage portion of her policy enables her to pay for legal defence and a settlement. Otherwise, she’d owe her client more than she could reasonably afford.

3) It can pay for client damages

Sam is a careful dentist but one day he accidentally cracks a patient’s tooth when pulling another one. Because Sam has insurance, he’s able to cover the medical expenses that his patient incurs, and he also has protection against lawyer fees and court costs. Without the legal fees and settlement coverage, his business would have had to handle these fees out of pocket.