Get the best professional liability insurance in Canada

Q: What’s the difference between professional liability insurance and errors and omissions insurance?

Professional liability insurance is also often referred to as errors and omissions insurance, so both policies are generally the same. Some insurance companies may use different names interchangeably, so it’s a good idea to ask your insurance broker about the specific coverages that come with your package.

Q: How do I get professional liability insurance in Canada?

Wondering how to get professional liability insurance? After providing us with a few details in our online quote comparison, we’ll connect you with a licensed commercial insurance broker in Canada to guide you through the process of purchasing the professional coverage you need.

Q: Is professional liability the same as professional indemnity?

In Canada, professional liability insurance may be used interchangeably with professional indemnity insurance. While the protections on both policies should be the same, each insurer is different, so it’s always a good idea to consult with a broker about the exact coverages you’ll receive.

Even the most skilled professionals can make a mistake. Protect yourself with errors and omissions coverage today. Request a free quote online.

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What is professional liability insurance?

Matt Hands, VP, Insurance and MoneySense

April 10, 2024

Professional liability insurance, also known as errors and omissions insurance or E&O, is a type of business insurance that provides financial protection in the event a client holds you liable for your work.

If you make an error that results in financial loss or your work isn’t up to par with your client’s expectations, they can sue. Having professional liability insurance helps cover the costs of any lawsuits and compensatory damages.

Who needs professional liability insurance in Canada?

Consider professional liability insurance if you provide advice, offer services, or develop products for clients. One mistake, even a small miscommunication could bring immense financial loss to your client’s business, leading to the downfall of your own. Some professions, such as lawyers and accountants, may require professional liability insurance to practice while others that should consider it include:

IT consultants
Management consultants
Software developers
Actuaries
Architects
Interior designers
Graphic designers
Personal trainers
Fitness instructors
Photographers

What does professional liability insurance cover?

This form business insurance typically includes coverage for legal fees and damages associated with the following:

Professional negligence

Errors and omissions

Media and advertising

Why do I need professional liability insurance in Canada?

Everyone makes mistakes, and sometimes one small mistake can lead to a large lawsuit. A client can also make claims of professional liability against you, even if you aren’t necessarily at fault. Having professional liability insurance in your back pocket ensures financial protection for you and your business against lawsuits alleging negligence, misconduct, and failure to deliver services as promised.

Here are a few potential situations in which having professional liability insurance could help cover any incurred legal fees and damages:

As an accountant, you make an auditing error that costs your client millions in taxes
As a personal trainer, you injure your client when teaching them a difficult skill
As a software developer, you forget to back up a client’s old file with valuable data
As a photographer, you lose the memory card with all your client’s wedding photos
As a consultant, your project doesn’t meet your client’s expected return on investment
As a copywriter, the piece you wrote for a client is held liable for copyright infringement

How much does professional liability insurance cost in Canada?

The cost of professional liability insurance can range anywhere from $150 to $2,000 annually, depending on the amount of coverage and your level of inherent risks. To find out how much you'll be paying start your online quote with us today.

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How to avoid a professional liability claim

Review contracts
Make sure each job you take comes with a contractual agreement outlining your deliverables clearly and in particular detail. Have a lawyer review any contracts before you sign them to check for missing information or required additions. The most iron-clad work contracts should give you a timeline for completion, limitations of liability, and a process of working out any potential complaints. You wouldn’t want to get sued for professional liability because you didn’t have a contract in place that outlined expectations for both you and your client.
Communicate clearly
Communicating clearly with your client is a good way to mitigate the risk of a professional liability claim whether that means asking for feedback on a prototype or confirming project deadlines. You should always check in with their expectations at different stages in the process as your final product could be nothing like what your client wanted if there was no communication in between.
Limit your workload
Limiting your workload doesn’t mean only focusing on one project at a time. It means you should be aware of what you or your business can handle and where your expertise lies. If you have three employees, don’t overburden them with excess work by scaling up with more clients. Trust with employees takes time to learn but can dissipate without due process and care.
Double-check everything
Double-checking your work is a simple, yet often disregarded, method that ensures your work is quality and comprehensive. If you accidentally leave in a typo on a flyer you designed, reprinting the entire batch could cost your client (and possibly you) thousands. An overlooked but simple bug fix could cost a technology company millions if left unattended. Small mistakes can lead to big claims, so double-checking is always worth the effort.
Follow best practices
It’s important to follow any laws and regulations in your industry to uphold the best standard of work possible and prevent any professional liability claims. For instance, if you’re a CPA preparing the financial documents for your client’s business, be sure to follow the CPA Accounting Handbook regulations. Rules are put in place to protect both you and your clients. No party wants one wrong move to require lawyers and lawsuits.

Factors that go into your professional liability insurance quote

Each industry brings a different level of risk. Generally speaking, the riskier your profession, the higher your professional liability insurance quote will be. A pilates trainer that teaches one class a week won’t be paying as much as an IT consultant working with millions of dollars on the line.

Get the best professional liability insurance today.

Request a complimentary quote from one of our qualified brokers. They will walk you through all your coverage options to help you find the right coverage at the best price.

Frequently asked professional liability insurance questions

What’s the difference between professional liability insurance and general liability insurance?

Although both professional liability and general liability insurance provide coverage for legal fees and compensatory damages, the two types of insurance cover a separate set of risks. Professional liability provides protection for claims of errors and omissions from your services while general liability provides protection for claims of bodily injury and property damage.

If you’re a personal trainer, and you push your client to try a skill that ends up resulting in an injury, the legal fees and damages can be covered with professional liability insurance. However, if a client injures themselves after tripping on a piece of equipment, general liability insurance would offer protection instead because your services didn’t do any harm.

What’s the difference between professional liability insurance and errors and omissions insurance?

When is professional liability insurance required?

Generally, professional liability insurance is not mandatory unless you work in a field that legally requires it, such as law or real estate. However, it’s highly recommended for professionals that offer services, provide advice, or develop products for clients as you wouldn’t want a claim to cause a financial burden or shut down your practice. Some clients may also require you to purchase a professional liability insurance policy to limit any risks.

How much professional insurance do I need?

The amount of professional liability coverage you opt for depends on the risk factors you face in your day-to-day operations with clients. Most businesses have at least $1 million in liability coverage while large businesses could have over $10 million for protection. If you teach one dance class a week, you probably wouldn’t need to purchase the same amount of coverage as a management consulting firm dealing with immense financial risks.