Understanding professional liability, aka Errors and Omissions (E&O) insurance, for your Florida business

Key takeaways:

  • Professional liability insurance protects your business if a client/customer sues you over negligence, mistakes, or misrepresentation that results in financial losses.
  • It’s also referred to as Errors & Omissions (E&O) insurance.
  • It covers legal expenses, judgments, and settlements related to professional services your company provides.
  • Professional liability also covers advertising injuries such as copyright infringement, privacy violations, slander, and libel.
  • It does not cover claims regarding breach of contract, physical injuries, government, or punitive damages.

Professional liability insurance, also known as errors and omissions (E&O) insurance, is a type of business insurance that helps protect your Florida company if you are found negligent regarding any services you provide to clients or customers. This type of policy is essential for many businesses, as it covers things like legal expenses and damages awarded to clients. 

Ready to learn more about professional liability and your Florida business? Let’s dive in and answer some of the most common questions about it.

Professional liability insurance defined

As a business owner, you likely provide professional services or advice to clients or customers. Professional services could be anything from financial planning and marketing/design work to legal counsel and medical care. E&O insurance helps protect your business if a client or customer sues you due to negligence that resulted in a financial loss.

For example, let’s say you own a small accounting firm. One of your clients alleges that a mistake or poor advice on your part resulted in fines or significant tax penalties for them. If the customer decides to sue your firm, professional liability insurance will help cover your legal expenses and any damages awarded to the client. 

Businesses that need professional liability coverage

While professional liability is vitally helpful for most businesses, some may be required to carry it by law. For example, architecture firms must have professional liability insurance to obtain a license. Contractors and subcontractors may also be required to have E&O coverage as part of their contracts. 

Businesses that should strongly consider professional liability coverage include:

  • Accountants 
  • Attorneys
  • Cloud storage/service providers
  • Consultants
  • Contractors
  • Financial consultants
  • Freelancers (graphic designers, copywriters, etc.)
  • Interior decorators
  • Tech professionals
  • Marketing/advertising professionals
  • Medical/dental facilities
  • Travel agents

Additionally, many companies will require you to hold this type of insurance before agreeing to do business with you. For instance, if you’re a consultant who works with other companies, your clients will likely require you to have E&O insurance before they hire you. 

What does professional liability cover?

Professional liability helps cover the cost of legal expenses and damages awarded to clients if your business is found negligent. It can help pay for settlements reached outside of court and the cost of any medical exams or depositions related to the case. 

It covers lawsuits related to:

  • Negligence
  • Inaccurate advice
  • Misrepresentation

Additionally, professional liability insurance protects against advertising injuries, libel, and slander. 

Understanding advertising injuries

Advertising injuries relate to errors in advertisements or marketing materials you create for a client, including print ads, radio or TV spots, or social media posts/ads. The “injuries” result in financial losses, lawsuits, fines, and reputational damage for your client. 

Advertising injury claims include several categories: 

  • Libel, slander, or product disparagement
  • Copyright infringement
  • Violations regarding the right to privacy
  • Using another company’s ideas in your advertisement

Logos, trademarks, and copyright infringement

Trademarks and copyrights apply to logos, images, phrases, words, or symbols associated with a brand, product, or company. It’s meant to protect intellectual property (IP), software programs, advertising campaigns, and characters or creations they “own.” Companies and individuals register these items to ensure no one else uses them.


  • Nike swoosh
  • Target logo
  • NBC peacock symbol
  • Words like “Super Bowl”
  • Product names like iPad, Band-Aid, Kleenex, Big Mac, Whopper
  • Capital One’s, “What’s in your wallet?”
  • Characters like Mickey Mouse, Superman, Bugs Bunny, and Marvel characters 
  • Books under copyright by an author, publisher, or company
  • Images under copyright by a photographer, publisher, or company

Using a trademarked item in your advertising can constitute an advertising injury, even in a social media post. Even if the post is positive, you can still get in trouble if the other company objects to the use of its images, name, or company info.

What’s not covered?

Note that professional liability does not protect you from all types of legal issues. For instance, E&O policies usually don’t cover claims regarding breach of contract or physical injuries. Additionally, professional liability insurance generally does not cover damages awarded to the government or punitive damages. 

How much does E&O insurance cost?

The cost of professional liability insurance varies depending on several factors. Certain businesses or industries that are more prone to lawsuits generally have higher premiums. Other factors include your state, your specific location (city), and the size of your business. 

An average policy can cost anywhere from $500 to $1,000 per year, per employee

Other types of commercial liability insurance

Your business could be at risk for other lawsuits, so most commercial enterprises carry several kinds of liability insurance. Let’s look at the most common policies you might need, even if you own a small business or do freelance work from home.

Commercial liability insurance

Commercial liability insurance protects your business from lawsuits relating to injuries and property damage to someone else. It covers medical bills, lost income, death benefits, and repairs/replacement of damaged property. Without liability insurance, you could pay tens of thousands of dollars in damages and medical payments if someone is injured while visiting or working on your property. 

Product liability insurance 

Product liability insurance covers lawsuits related to bodily injury and property damage caused by a product you manufacture, sell, or distribute. 

Industries that might need product liability include:

  • Retail
  • Manufacturing/distributing
  • Hardware/software developers
  • Wholesale
  • Import/export
  • Construction/plumbers/electricians
  • Restaurants

Cyber liability insurance

Cyber liability insurance protects your business against expenses or claims related to data breaches involving targeted or stolen data. Cyber thieves often target personal or sensitive information about your customers, clients, or patients, such as bank/credit card numbers, social security numbers, birthdates, and passwords. 

What it covers:

  • Legal fees
  • Notifying customers about the breach
  • Recovering and/or restoring compromised data
  • Repairing damaged computers & systems

Professional protection for your business 

If you provide professional services, products, or advice, it’s essential to consider buying professional liability insurance. A lawsuit could result in permanent financial damage, no matter your type of business.

Avante Insurance can help you secure the right commercial policies for your business insurance needs. Contact us today to request a quote. 

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.