Professional Liability
Professional Advice Coverage
Professional liability covers claims arising from the advice, recommendations, and professional judgments your business provides to clients. If a client suffers a financial loss and attributes it to your guidance — even if you believe your advice was sound — you face a professional liability claim. General liability does not cover these claims.
Professional Liability
What You Need to Know About Professional Advice Coverage
Claims-Made Coverage Structure
Professional liability policies are typically written on a claims-made basis — meaning coverage applies when the claim is made, not when the alleged error occurred. Understanding retroactive dates and extended reporting periods is critical when managing policy changes.
Defense Outside the Limits
Some professional liability policies include defense costs within the policy limits — reducing the amount available for settlements. Policies with defense costs paid outside the limits preserve the full limit for indemnity and are generally the better structure.
Industry-Specific Forms
Professional liability policy forms vary significantly by profession. Architects, engineers, accountants, real estate professionals, and consultants each have specific forms with coverage grants and exclusions tailored to their industry's risk profile.