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How Much Does Professional Liability Insurance Cost?
How much does professional liability cost? This article can help you understand what you may pay and why.

Home » Professional Services » How Much Does Professional Liability Insurance Cost?

How Much Does Professional Liability Insurance Cost?

How much does professional liability cost? This article can help you understand what you may pay and why.
The average professional liability insurance policy in America costs between $700 and $1000 annually.

The costs vary widely depending on several factors discussed below such as industry, coverage amounts, and size of the company.

Average By Industry

Industries more prone to allegations of negligence tend to have higher professional liability costs.

Industries such as healthcare, engineers and architects, consultants, and financial services where claims tend to be both frequent and severe have the highest average premiums.

Average by Amount of coverage

Costs of professional liability increase as you increase the amount of coverage that you need for your business.

Professional liability insurance policies have two limits – per occurrence limit (how much the insurance carrier will pay for one claim) and an aggregate limit (how much an insurance carrier will pay for all claims during the policy period regardless of the number of claims). 

Here are some typical premiums for different amounts of coverage:


  • $250,000 per occurrence/$250,000 aggregate range from $500 to $1,000 on average
  • $1 million per occurrence $2 million aggregate range from $1,000 to $3,000
  • $2 million per occurrence $2 million aggregate range from $2,000 to $3500
Professional Liability Costs By Industry

Factors That Determine Professional Liability Costs

The final cost of your professional liability insurance is determined by each of the insurance carriers. When determining the final policy premium, insurance carriers consider several factors including the ones below.

Type of Business

The industry that you’re in and the type of work that you perform will likely impact your professional liability insurance costs. Industries and business that are at a higher risk for frequent or large losses are typically more costly than those less likely to experience a professional liability claim. So a legal firm, for example, who is providing routine advice for a fee and working directly with clients, will likely pay more for professional liability than a landscaping company.

Size of Your Business

The larger your business – in both revenue and number of employees the larger your risk of claims being brought against you. More employees and clients means an increased chance that a mistake will be made. This increased risk can result in higher premiums.

Years in Business

Newer businesses generally have less processes and procedures in place to help lower the risk of professional liability risks. Because of this newer businesses generally have higher professional liability insurance costs.

Claims History 

If you have experienced prior professional liability claims, this could increase your premiums going forward because insurers may view you as more likely to have additional claims. Conversely, few or no prior claims can help you lower your professional liability costs.  

Coverage Limits

Coverage limits for professional liability insurance range from $250,000 to $2 million dollars. You can expect to pay more for increased coverage amounts. 

Deductible Amount

Like coverage limits, the deductible that you choose will impact your professional liability costs. Your deductible is the amount you agree to pay before your insurance begins to pay. Choosing a higher deductible shows the insurance carrier you’re willing to share in more of the risk and can lower your overall premiums.

Ways To Save On Your Professional Liability Insurance

As a business owner there are many things that you can do to help reduce your professional liability insurance costs and lower your chance of being held liable should you face a lawsuit.

Your best defense against being potentially found liable for negligence (and the financial issues that come with it) is having solid, well managed business operational process in place. Some of the most critical include:

  • Using legally reviewed and executed contracts in place that clearly outline expectations and scope of work
  • A process to document changes in scope and timeline, signed off on by the client
  • Regular client updates and communication practices
  • Adequate training for staff and contractors
  • Vet and reference check all contractors
  • Only perform work within your area of expertise

InsureGood clients have access to Protect360 services that provide a full spectrum of business risk services and resources to assist them with navigating their business risks such as Human Resources support, loss prevention and more.

To lower your premiums initially consider:

  • Paying your entire premium in full, at the beginning of your policy period
  • Increase your deductibles
  • Implement the right structure (examples above) to stay claim free

 How To Get a Quote For Professional Liability Insurance

Getting a professional liability quote with InsureGood is fast and easy. Fill out your info here – once we have your info we’ll quote you with several of our best carriers and reach out to you with options for professional liability and other coverages you may need. The entire process shouldn’t take more than 15 minutes of your time.

The Last Word

    The risk of lawsuits comes with business ownership but there are things you can do to minimize your risks and your professional liability costs. Your business is important – make sure you protect it.

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