Professional Liability Insurance for Service Businesses

General liability covers defined bodily injury and property damage claims. Professional liability, often called errors and omissions, can cover financial-loss claims from a client who says your advice or work fell short. General liability commonly excludes professional services, so businesses that provide expertise or advice should review both coverages.

A claims-made policy generally requires the claim to be made during the policy period and involve work after the retroactive date. A lapse or changed retroactive date can leave prior work without protection. Review continuity and any extended reporting option before switching or ending coverage.

The retroactive date is the earliest work the policy can cover. Work done before it is not protected, even if the policy is active when the claim arrives. New businesses typically receive a retroactive date when coverage begins. When changing insurers, confirm that the new date matches or predates the old one so prior work does not fall into a gap.

No. Common exclusions or limitations involve intentional or dishonest acts, known circumstances, prior acts, bodily injury or property damage, intellectual property, cyber events, and liability assumed solely by contract. Some forms provide defense until conduct is established or offer selected extensions. Compare the actual wording.

The appropriate limit depends on the scope and value of services, contract requirements, potential client loss, defense-cost treatment, and available excess capacity. A contract minimum is not a coverage recommendation. BLIS can compare the requested limit with the terms insurers are willing to offer.

An extended reporting period may be important when a claims-made policy ends, the business closes, or replacement coverage will not preserve prior acts. Availability, length, cost, election deadlines, and eligible acts depend on the form. It extends the reporting window for qualifying prior acts; it does not insure new services performed afterward.

Technology companies should evaluate technology E&O when clients depend on their software, systems, or services. Cyber coverage addresses different first- and third-party event costs, although combined technology forms can blend the two. The contract, service description, data exposure, and policy definitions determine which coverage parts may apply.