At ContractorNerd, we’ve simplified the process of getting professional liability insurance. Our digital platform streamlines quotes and coverage, and our licensed brokers provide guidance to ensure your policy aligns with your business needs. You can reach our team by chat or phone for help with your trade and projects, to discuss common claim situations, and to find ways to keep your premiums manageable while staying protected.

With our digital tools and broker support, you can get several quotes, secure coverage, and receive proof of insurance in just a few days. You can feel confident knowing your choices are backed by professional advice. You won’t have to deal with extra paperwork, back-and-forth calls, or waiting for documents in the mail.

ContractorNerd helps you get complete quotes and secure coverage quickly, often within days instead of weeks.

What Does Professional Liability Insurance Cover?

At their core, professional liability policies provide contractors with financial protection against losses from errors, omissions, or negligence in professional services. While general liability insurance covers bodily injury and property damage, it typically excludes financial losses from professional services. With contractors providing new levels of design assistance, delegated design, and design-build services on construction projects, professional liability insurance offers coverage for this crucial exclusion.

Economic Loss & Professional Negligence

  • Covers financial losses when contractors fail to deliver projects on time or within budget
  • Protects against claims arising from inadequate design specifications or professional advice
  • Pays legal defense costs and settlement amounts if clients sue for financial losses, up to policy limits

For example, if a contractor estimates a warehouse project at $2M but a loading platform proves inadequate for stated needs, pushing costs to $2.5M, the contractor could be liable for the additional $500K without proper coverage.

Protective Indemnity & Faulty Workmanship

  • Covers financial losses when subcontracted professionals (architects, engineers) provide inadequate services
  • Functions in excess of subcontractor’s underlying insurance when their coverage isn’t adequate
  • Helps defend contractors and pay difference in costs when needed

Most CGL policies don’t cover rectification of errors and often exclude damages from defective workmanship. Professional liability fills this gap.

Rectification/Mitigation Coverage

  • Proactively responds to issues that could lead to third-party claims
  • Advances funds directly to rectify errors discovered during construction
  • Helps contractors stay on schedule and within budget while maintaining client relationships

Pollution & Mold Coverage

  • Covers pollution arising from construction activities or operations typically excluded from general liability
  • Includes coverage for transported pollutants, mold, emergency response, and restoration costs
  • Critical for roofers, window installers, HVAC firms, and plumbers who face hidden mold risks

Errors & Omissions

Professional liability insurance (also called errors and omissions or E&O insurance) covers:

  • Errors made while performing professional services
  • Omissions in completed work
  • Negligence in work performed
  • Incorrect professional advice provided

What Contractors Need Professional Liability?

Professional liability insurance is especially critical for:

  • Specialized Contractors – Electrical, HVAC, mechanical, fire protection, and plumbing contractors providing design assistance (may start with endorsements)
  • General Contractors – Performing delegated design or value engineering services (endorsement often sufficient for limited exposure)
  • Construction Managers – Providing professional advice on project delivery, both agency and at-risk (often require standalone policies)
  • Design/Build Firms – Taking single-point responsibility for both design and construction (typically need standalone coverage)

E&O Endorsements vs. Standalone Professional Liability Policies

Contractors have two primary options for securing professional liability coverage: adding an E&O endorsement to their general liability policy or purchasing a standalone professional liability policy. Understanding the differences is crucial for making the right choice for your business.

Faulty Workmanship (Contractors E&O) Endorsements to General Liability

Many general liability policies allow contractors to add errors and omissions coverage as an endorsement. This can be an attractive option for contractors with limited professional service exposure:

Coverage Limits: E&O endorsements typically range from low-limit options of $10,000 to $25,000 up to full policy limits matching your general liability coverage.

Cost Structure: The cost varies dramatically based on your limits and exposure:

  • Low Limit Endorsement ($10,000 to $25,000 limits): As low as $5-$25 per month
  • Full Policy Limit Endorsement ($1,000,000 limits): Starting from $200 per month

Best For:

  • Contractors who occasionally provide design input or recommendations
  • Those who need to meet basic contract requirements for professional liability
  • Businesses with limited design-build exposure

Limitations:

  • Often excludes major professional services like full design-build projects
  • May not include important coverages like protective indemnity or rectification
  • Lower limits may be inadequate for significant professional service claims
  • Coverage typically more restrictive than standalone policies

Standalone Professional Liability Policies

For contractors with substantial professional service exposure, a separate professional liability policy provides more comprehensive protection:

Coverage Limits: Typically start at $1,000,000 per occurrence with options for much higher limits based on project requirements.

Cost Structure: For $1,000,000 limits, minimum premiums typically start around $2,500-$5,000 annually, with a typical deductible of $5,000.

Best For:

  • Design-build contractors
  • Construction managers providing professional services
  • Specialty contractors with significant design responsibilities
  • Contractors working on projects requiring specific professional liability limits

Advantages:

  • Broader coverage with fewer exclusions
  • Includes valuable extensions like protective indemnity and rectification coverage
  • Higher limits available to match project requirements
  • Dedicated coverage that doesn’t erode general liability limits

Professional Liability Limits and Costs

The right coverage approach depends on your specific professional service exposure:

For Limited Professional Services

If you provide occasional design advice or minor professional services:

  • Option 1: E&O endorsement with $10,000-$100,000 limits
  • Expected cost: $5-$25 per month added to your GL premium
  • Deductible: Often mirrors your GL deductible or has minimal separate retention of $500+

for Moderate Professional Services

If you regularly provide design assistance or value engineering:

  • Option 1: Higher-limit E&O endorsement up to GL policy limits
  • Option 2: Standalone policy with $1,000,000 limits
  • Expected cost: $200 per month for endorsement; $2,500-$5,000 annually for standalone
  • Deductible: $2,500-5,000 typical for standalone coverage

For Substantial Professional Services

If you’re a design-build contractor or construction manager:

  • Recommended: Standalone policy with $1,000,000-$5,000,000 limits
  • Expected cost: $5,000-25,000+ annually depending on revenue and services
  • Deductible: $5,000-10,000 typical

These limits provide robust protection for most contractors performing design-build or professional services. Always review specific project requirements, as some contracts mandate minimum professional liability limits.

How ContractorNerd Streamlines Your Insurance Process

Finding and securing the right professional liability coverage – whether as an endorsement or standalone policy – shouldn’t consume hours of your valuable time.

Low-limit professional liability endorsements can be added to your general liability policy at quote or during the policy period. This experience is digital with pricing reflected at the time of quote.

Stand-alone professional liability policies have a more modernized insurance buying process:

Step 1: Simplified Information Gathering. We collect 90% of the necessary information through our streamlined digital platform. Our system helps you determine whether an E&O endorsement or a standalone policy best fits your needs. No more repeating the same details to multiple agents or filling out redundant forms.

Step 2: Access to Leading Insurers. Our team connects you with quotes from top-rated insurers. We leverage our relationships to access markets and pricing that individual contractors often can’t reach on their own, ensuring you see all available options.

Step 3: Digital Binding and Documentation. Once you select a quote, we handle everything digitally. Complete the entire process digitally, satisfying subjectivities, paying digitally, and having access to certificates of insurance on the same day as payment.

With this streamlined process, you can move from your first quote request to having coverage and certificates much faster than with traditional methods. You’ll still get the full protection your contracting business needs.

Get Professional Liability Coverage Today

Proper professional liability insurance is essential for contractors providing any level of design services or professional advice. Whether you need a simple E&O endorsement for occasional design input or a comprehensive standalone policy for design-build projects, having the right coverage fills a critical gap in your general liability policy.

The good news is that with ContractorNerd’s digital platform and expert brokers, you can get insured in days, not weeks. Our licensed brokers are ready by chat or phone to review your trade and projects, recommend the right limits and endorsements, and explain common claim situations so you know what’s covered. They’ll also help you manage premiums with smart deductible choices and carrier selection, so you stay protected.

With instant digital quotes and advice from our expert brokers, you get the convenience of technology and the confidence of professional support. We’ll help you decide if an endorsement or standalone policy is right for your business, compare options from different carriers, and find the most cost-effective coverage for your needs.

Try ContractorNerd’s modern platform to efficiently and affordably secure the protection your contracting business needs, backed by the expertise of brokers who understand your industry.