One of the most common questions asked by business owners, freelancers, and consultants is how much is professional liability insurance.
With rising legal risks and increasing client expectations, professional liability insurance has become a must-have for many professions. However, the cost of this insurance can vary widely depending on several factors.
In this detailed guide, we will explain professional liability insurance cost per month, what affects pricing, average rates by profession, and how you can reduce your premium while maintaining adequate coverage.
What Is Professional Liability Insurance? (Quick Overview)
Professional liability insurance, also known as errors and omissions insurance (E&O insurance), protects professionals against claims of negligence, mistakes, misrepresentation, or failure to deliver professional services as promised.
If a client claims your services caused them financial loss, professional liability insurance helps cover legal defense costs, settlements, and court judgments.
How Much Is Professional Liability Insurance on Average?
Average Cost of Professional Liability Insurance
- Small businesses: $40 – $150 per month
- Freelancers & consultants: $300 – $1,000 per year
- High-risk professions: $2,000 – $10,000+ per year
On average, most small businesses pay around $60–$100 per month for professional liability insurance coverage.
Professional Liability Insurance Cost Per Month
Many professionals search specifically for professional liability insurance cost per month. Here’s a breakdown:
- Low-risk professions: $25 – $50/month
- Medium-risk professions: $60 – $120/month
- High-risk professions (medical, legal): $200 – $800/month
The higher the risk of lawsuits, the higher the premium.
Factors That Affect the Cost of Professional Liability Insurance
Several key factors influence how much you pay for professional liability insurance:
1. Type of Profession
Doctors, lawyers, engineers, and financial advisors pay higher premiums due to higher lawsuit risks.
2. Business Size and Revenue
Higher annual revenue increases exposure and insurance cost.
3. Coverage Limits
Policies with higher limits (e.g., $2M coverage) cost more than basic $500K or $1M policies.
4. Claims History
Previous lawsuits or claims significantly increase premiums.
5. Location
Insurance rates vary by state due to legal environments and claim frequency.
6. Policy Type
Most professional liability insurance policies are claims-made, which impacts pricing.
Average Professional Liability Insurance Cost by Profession
| Profession | Average Annual Cost |
|---|---|
| IT Consultant | $500 – $1,200 |
| Marketing Consultant | $400 – $1,000 |
| Accountant | $700 – $2,500 |
| Real Estate Agent | $600 – $2,000 |
| Engineer | $1,500 – $4,000 |
| Lawyer | $3,000 – $10,000+ |
| Doctor (Malpractice) | $5,000 – $20,000+ |
This shows why searching how much does professional liability insurance cost depends heavily on your industry.
Is Professional Liability Insurance Worth the Cost?
Yes. Even a single lawsuit can cost tens of thousands of dollars in legal fees alone. Compared to that risk, the monthly cost of professional liability insurance is relatively low.
Benefits Include:
- Protection against costly lawsuits
- Coverage for legal defense fees
- Increased client trust and credibility
- Compliance with contract requirements
For most professionals, professional liability insurance pays for itself with just one avoided legal expense.
How to Lower Professional Liability Insurance Cost
If you’re concerned about pricing, here are ways to reduce your premium:
1. Choose Appropriate Coverage Limits
Avoid over-insuring beyond your actual risk.
2. Bundle Business Insurance Policies
Combining with general liability insurance often reduces total cost.
3. Maintain a Clean Claims History
Risk management lowers premiums long-term.
4. Work With an Insurance Broker
Brokers compare multiple insurers to find the best rates.
5. Pay Annually Instead of Monthly
Annual payments often come with discounts.
Professional Liability Insurance vs Errors and Omissions Insurance Cost
Many people ask if there is a price difference between these two. The answer is no.
Professional liability insurance and errors and omissions insurance are the same, and their costs are identical. The name just varies by industry.
Is Professional Liability Insurance Required by Law?
Professional liability insurance is not always legally required, but it is mandatory or strongly recommended in professions such as:
- Healthcare (medical malpractice insurance)
- Legal services
- Financial advisory roles
- Engineering and architecture
Even when not legally required, many clients demand proof of coverage.
Professional Liability Insurance for Small Businesses
For small businesses, professional liability insurance is one of the most cost-effective protections available. A small monthly premium can protect against financial ruin caused by lawsuits, contract disputes, or client claims.
Final Thoughts: How Much Is Professional Liability Insurance?
So, how much is professional liability insurance? For most professionals, it costs between $40 and $150 per month, depending on industry, risk level, and coverage needs.
Considering the rising cost of lawsuits and legal defense, professional liability insurance is not just an expense—it’s a smart investment in your business’s future.