Business insurance / Professional service firms
The insurance program around professional liability.
E&O addresses allegations arising from professional services, but professional firms can also have premises, property, employee, vehicle, cyber and catastrophic-liability exposures. The complete insurance program should reflect how the firm actually operates.
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Program architecture
One business can create several different kinds of loss.
A client’s financial-loss allegation may implicate E&O. A visitor slipping in the office may implicate general liability. Fire may implicate commercial property and business income. An employee injury belongs to workers’ compensation. A vehicle accident may require commercial auto or hired/non-owned auto. A ransomware event can implicate cyber. Severe liability claims may require umbrella or excess limits. The policies should be reviewed as a system rather than as interchangeable products.
01
General Liability
General liability is generally oriented toward third-party bodily injury, property damage and certain personal/advertising injury exposures—not financial loss caused by professional advice. That boundary is why a professional firm may need both CGL and E&O.
02
Business Owner’s Policy
A BOP commonly packages property, general liability and business-income protection for eligible small businesses. Professional liability, workers’ compensation and commercial auto generally require separate coverage.
03
Cyber
Professional firms often hold sensitive client, employee or transaction data. Cyber coverage can address security/privacy events and first-party incident costs, while E&O can address alleged failure of professional services. Technology and cyber forms sometimes combine these exposures, but the wording must be examined.
04
Workers’ Compensation
Employee injury is a separate exposure from client professional liability. In California, employers generally must secure workers’ compensation when they have employees; classification, payroll, ownership and officer/member treatment affect the policy and premium.
05
Commercial Property
Office contents, tenant improvements, computers, records, leased-space requirements and business-income exposure are property questions, not E&O questions. The valuation method, covered causes of loss, deductibles and business-income period deserve attention.
06
Commercial Auto / HNOA
Professional firms may own no vehicles and still have auto exposure when employees rent cars or use personal autos for errands, inspections, client visits or field work. Owned auto and hired/non-owned auto should be distinguished.
07
Umbrella / Excess
Umbrella and excess liability can provide additional limits over scheduled underlying liability policies. Whether professional liability is included in an umbrella or excess tower is form-specific and should never be assumed.
Coverage assistance from ECLICK Business Insurance
Build the business program around the actual operations.
E&O Provider is an educational resource from ECLICK Business Insurance Services. ECLICK can help professional-service firms compare E&O with the general liability, property, workers’ compensation, auto, cyber and other coverages that may belong around it.