Short answer: Professional liability insurance, also called errors and omissions (E&O), helps when a client says your advice, design or professional service was wrong, late or left something out and it cost them money. It can pay for your defense and for covered settlements or judgments, up to the policy limit and subject to the policy’s terms and deductible. Most professional liability policies are written on a claims-made basis, which works differently from general liability. McGriff-Williams Insurance, an independent agency in Gainesville since 1983, helps Florida businesses and professionals understand and place this coverage.

Who needs professional liability?

Any business that gets paid for advice, design, technical knowledge or a professional service has some exposure. Common examples include:

  • Accountants, bookkeepers and tax preparers
  • Consultants, IT firms and technology providers
  • Real estate professionals, property managers and appraisers
  • Architects, engineers, surveyors and interior designers
  • Contractors that design, manage or coordinate work for others (see the construction section below)
  • Inspectors, including wood-destroying organism inspectors
  • Insurance agents and financial professionals

Is it required? For most professions, Florida law doesn’t require it. The requirement usually comes from a client contract, a government agency you contract with, a lender or a professional association. A few Florida licenses do set minimum financial responsibility. For example, pest control licensees that perform wood-destroying organism inspections must carry E&O insurance or a bond of at least $250,000 per occurrence and $500,000 aggregate, or show qualifying net worth. Check the rules for your own license.

What it covers and what it doesn’t

Professional liability generally responds to claims of negligence, errors or omissions in the professional services you provide. Policies differ, but they usually cover:

  • Defense costs, such as attorneys and consultants, as the policy allows
  • Settlements and judgments for covered claims, up to the limit

Things it commonly doesn’t cover:

  • Bodily injury and property damage, which usually belong to general liability (some professional policies cover them when they result from a professional error)
  • Intentional, dishonest or criminal acts
  • Fines and penalties, where the law doesn’t allow them to be insured
  • Promises beyond what the law would require, such as a contract term that makes you liable even without negligence
  • Claims from work done before the policy’s retroactive date

How claims-made coverage works

A claims-made policy covers claims first made against you during the policy period, for work done after the retroactive date. That’s different from an occurrence policy, like most general liability, which covers injury or damage that happens during the policy period no matter when the claim comes in. The terms that matter most:

  • Claims-made trigger. The policy in force when the claim is made is the one that responds, not the policy in force when you did the work. Many policies also require the claim to be reported during the policy period or a short window after it.
  • Retroactive date. Work done before this date isn’t covered. Keeping the same retroactive date when you renew or change insurance companies generally keeps your earlier work eligible for coverage. This is often called prior acts coverage. It can still be limited by other terms, such as exclusions for problems you knew about before the policy began, so review them when you switch.
  • Extended reporting period (tail). If you stop buying coverage, retire or close the business, a tail gives you more time to report claims for work done before the policy ended (back to the retroactive date). It doesn’t cover new work. It usually has to be purchased within a short window after the policy ends.
  • Defense within limits. On many professional policies, defense costs reduce the limit available to pay a settlement or judgment. A long defense can use up a large part of the limit.
  • Reporting circumstances. Many policies let you report a situation that could lead to a claim. If you give that notice the way the policy requires and a claim follows later, it’s generally treated as made during the policy period when you reported it. Read the notice provision and follow it closely.

Claims can arrive years after the work. In Florida, an action for professional malpractice other than medical malpractice generally has to be brought within two years from when it was discovered or should have been discovered. Actions based on the design, planning or construction of an improvement to real property generally have a four-year limit with a seven-year outer limit, with exceptions in the statute. That’s one reason to keep your retroactive date and think about a tail before you close or sell a business.

Professional liability for contractors

A contractor’s general liability policy often has a professional services exclusion or an endorsement that limits coverage for design, engineering or consulting work. When your company takes on design or management responsibility, that gap can matter.

Design-build

Under a design-build contract, one firm is responsible for both the design and the construction. In Florida, a certified or registered general contractor doesn’t need its own architect or engineer license to negotiate or perform a design-build contract, as long as the architectural and engineering services are performed by licensed architects and engineers. The design-builder is still responsible to the owner for the design. If the design firm you hired makes an error, the owner’s claim usually comes to you first, and the design firm’s own policy limits may not be enough.

Construction manager and owner’s representative work

Construction managers, program managers and owner’s representatives may be accused of errors in scheduling, estimating, coordinating trades, reviewing pay applications or advising the owner. Those are professional services claims, and they often fall outside a general liability policy, especially when no one was hurt and nothing was physically damaged.

Delegated design and design-assist

Project documents sometimes delegate the design of a system or component, such as trusses, fire sprinkler systems, curtain wall or temporary shoring, to the contractor or a sub. In Florida, that delegated design is typically prepared, signed and sealed by a licensed delegated engineer, working from written requirements set by the project’s engineer of record. The engineer may be an outside consultant or work for the contractor or supplier. Florida law also lets electrical, plumbing, air-conditioning and mechanical contractors design the systems they install on smaller projects that fall within limits set in the engineering statute. When your company provides, hires out or approves design, you can take on design risk, even if a licensed engineer seals the drawings. Your contract and your role on the project decide how much, and a general liability policy may exclude it.

Contractors professional liability coverage

Contractors professional liability (CPrL) is written for these exposures. It can be bought on an annual basis for all of your operations or for a specific project, and it’s often combined with contractors pollution liability. Two features to ask about:

  • Rectification coverage. Included in some policies, it can help pay the cost of correcting a design error found after the work is in place but before it turns into a professional liability claim, so the project can keep moving. Some forms call it mitigation coverage, and terms vary by policy.
  • Protective coverage. First-party coverage that can act as excess over the design professionals’ own policies when their limits are used up or too low. You generally have to prove the design professional was negligent to collect.

For more on why general liability won’t pay to redo faulty work, see our guide to the “your work” exclusion. For the rest of a contractor’s coverage, see contractors insurance in Florida.

Questions to ask before you buy or renew

  • Do any of my contracts require professional liability, and at what limit and for how long after the work ends?
  • What is my retroactive date, and will it carry over if I change insurance companies?
  • Are defense costs inside or outside the limit?
  • What would a tail cost if I retire, sell or close?
  • Does my general liability exclude professional services, and does my professional policy pick up what it excludes?
  • For contractors: does the policy cover design work done by consultants I hire, and does it include rectification or protective coverage?

Frequently asked questions

Is professional liability the same as general liability?

No. General liability mainly covers bodily injury, property damage and personal and advertising injury claims. Professional liability typically covers financial loss a client says your professional services caused. Many businesses need both.

What does claims-made mean?

The policy in force when the claim is made responds, as long as the work happened after the retroactive date. If you let coverage lapse, claims made later for earlier work may not be covered unless you buy a tail.

Does Florida require professional liability insurance?

For most professions, no. Contracts, clients and lenders usually set the requirement. A few licenses have their own rules, such as wood-destroying organism inspections.

Do contractors need professional liability?

Contractors that do design-build, construction management, design-assist or delegated design work often do, because general liability may exclude professional services. Contractors that only build to someone else’s plans may need it less, but shop drawings, value engineering suggestions or design-assist input can still create design exposure.

What is a tail?

An extended reporting period. It gives you more time after a claims-made policy ends to report claims for work done before it ended, back to the retroactive date.

Sources

General information, not legal or coverage advice. Coverage depends on the policy issued, its terms and underwriting. Statute references are to the 2026 Florida Statutes and are summarized. Talk with a Florida attorney about deadlines that apply to a specific claim.

McGriff-Williams Insurance is an independent insurance agency in Gainesville, in business since 1983 and licensed in Florida. We’re at 3501 W University Ave, Gainesville, FL 32607. Questions: (352) 371-7977, Monday to Friday, 9 a.m. to 5 p.m.

Last updated October 31, 2026