Best Professional Liability Insurance for Small Businesses in 2024
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Professional liability coverage shields professionals from financial losses due to negligence claims related to their services.
Based on its affordable pricing and customer satisfaction, Next is the top-rated professional liability insurance provider, with a MoneyGeek score of 97 out of 100. The average professional liability insurance policy from Next costs $41 per month for sole proprietors and $241 per month for LLCs with 20 employees.
Overall Best Professional Liability Insurance
Next is MoneyGeek's choice for the best professional liability insurance for small businesses thanks to its affordability, high customer satisfaction and quick quote times. Strong scores in these categories helped Next secure a MoneyGeek score of 97 out of 100, the highest among listed companies.
The Hartford, our runner-up with a score of 95, also scored high in customer satisfaction. Use the table below to compare MoneyGeek scores and costs for all companies we reviewed.
Affordable for LLCs and sole proprietors
High customer satisfaction
Quick quote times
Limited total coverages offered
Lower financial stability
As a leading provider of professional liability insurance for small businesses, Next is affordable for both LLCs and sole proprietors. The insurer's strong customer satisfaction rating reflects its commitment to quality service. Obtaining a quote is quick, averaging just over a minute. However, Next's offerings are slightly limited in terms of total coverage. Based on an A- rating from AM Best, its financial stability could also be improved but is nevertheless adequate. Despite these minor drawbacks, Next remains a strong choice for small businesses seeking professional liability coverage.
Cheapest Professional Liability Insurance
Next is also the cheapest professional liability insurance provider for small businesses, with an average monthly cost of $41 for sole proprietors and $241 for LLCs with 20 employees. Note that our affordability ranking combines costs for both business types, so the cheapest company overall may not necessarily offer the lowest rates for both categories.
Excellent affordability for both LLCs and sole proprietors
Outstanding customer satisfaction record
Rapid quote delivery
Range of coverages could be broader
Financial stability is moderate
Next stands out in the insurance market as the most budget-friendly option for small business owners seeking professional liability coverage. Its competitive rates for LLCs and sole proprietors, coupled with a strong customer satisfaction record, make it a compelling choice. Although the quote process is impressively quick, its coverage scope could be more comprehensive. Although not top-tier, its financial stability is still respectable with an A- rating from AM Best. Overall, Next's cost-effective offerings make it an appealing choice for small businesses seeking coverage.
Best Professional Liability Insurance for LLCs With 20 Employees
The Hartford shines as the best professional liability insurance for small businesses structured as LLCs with 20 employees, earning an impressive MoneyGeek score of 99 out of 100. With an average monthly premium of $304 for such businesses, The Hartford's blend of value and quality makes it the preferred choice for LLCs seeking professional liability coverage.
Excellent affordability for LLCs
Strong financial stability
Comprehensive coverage options
Slightly longer quote times
The Hartford stands out as the best professional liability insurance provider for LLCs with 20 employees. Known for its affordability, robust financial stability and comprehensive coverage, it fulfills the diverse needs of a small business with employees. Despite a slightly longer quote time of one minute and 26 seconds, the quality of service and A+ AM Best rating more than compensate. The Hartford's commitment to customer satisfaction and its impressive coverage offerings make it a top choice for small LLCs.
Best Professional Liability Insurance for Sole Proprietors
With a MoneyGeek score of 97 out of 100, Next is the top choice for small businesses without employees. Next offers an average monthly premium of just $41 for this business profile. The affordability and quality of its services make it an excellent choice for sole proprietors seeking professional liability coverage.
Highly affordable for individual proprietors
Exceptional customer satisfaction
Quick in generating quotes
Somewhat limited coverage options
Lower financial stability compared to other insurers
Next, a prominent player in the insurance market, offers top-rated professional liability coverage, particularly for sole proprietors without employees. Its exceptional affordability and strong customer satisfaction metrics highlight its commitment to quality and value. While Next's quotes are generated in little over a minute, its total coverages could be more extensive. Financial stability, gauged by an A- AM Best rating, leaves room for improvement, but the overall package remains appealing for small businesses and individual operators.
Best Professional Liability Insurance for Fast Quotes
Thimble is fastest in providing professional liability insurance quotes for small businesses, boasting an average quote time of just 42 seconds. This swift service sets Thimble apart, making it the quickest among all the companies reviewed on our list. If quote speed is a priority, Thimble is the top choice for obtaining small business professional liability insurance.
Extremely fast quote times
Affordable for sole proprietors
Good range of coverages
Less affordable for LLCs
Moderate financial stability
Lower customer satisfaction
Thimble distinguishes itself in the insurance market with its super-fast quote process, providing responses in just 42 seconds. This speed — combined with an attractive monthly cost of $47 for sole proprietors and a solid range of coverage options — makes Thimble a strong contender. However, it's less affordable for LLCs, offering a monthly cost of $1,838 for LLCs with 20 employees. Thimble also has a moderate AM Best financial stability rating of A. Customer satisfaction lags behind some competitors, as well. Nonetheless, Thimble's speed and coverage options make it a noteworthy choice for those seeking quick professional liability insurance quotes.
How Much Is Professional Liability Insurance?
The average monthly cost of professional liability insurance differs based on the nature and size of the business. Sole proprietors without employees can anticipate costs around $80 per month, whereas LLCs with 20 employees face an average cost of $706 per month.
What your business will pay for professional liability insurance is contingent on a variety of factors:
- Industry: Some industries inherently carry higher risk, increasing insurance premiums. For instance, a technology consulting firm may face greater potential liabilities than a small boutique.
- Business size and employee count: The size of a business, including its employee count, impacts costs. More employees can increase the chance of errors or omissions that could lead to claims, resulting in higher premiums.
- Location: A business's geographical location can influence costs, as different regions or cities may have varying risk levels or local regulations that affect insurance rates.
- Claims history: Businesses that have made numerous insurance claims in the past are likely to see higher premiums.
- Coverage limits: Opting for higher coverage limits will increase premiums. It's a balance between the level of protection required and the affordability of the premiums.
By understanding these influencing factors, businesses can better anticipate their insurance budget and select a provider that offers the best balance of cost and coverage.
How to Get the Best Professional Liability Insurance
Obtaining the best professional liability insurance is key to financially protecting your business against potential claims. This process involves understanding your risks, assessing your coverage needs and finding a reliable insurer. Here are five steps you can follow to get the best coverage for your business:
Evaluate Your Risks
Each business has its own unique set of risks — for instance, a medical practice would have different liabilities than a marketing agency. Investigate the specific risks related to your industry and business type. Understanding these risks will help you identify the coverage you need to protect against potential claims.
Determine Coverage Requirements
Once you've identified your risks, estimate the potential financial impact of claims to estimate the amount of coverage you need. You want enough coverage to protect against potential claims while avoiding paying for unnecessary coverage.
Compare Insurers
Don't just settle for the first insurance provider you find — compare offerings from multiple providers. Look for insurers who have experience in your industry, as they're likely to offer coverage that's tailored to your specific needs. Weigh their coverage options, prices and reputation in the industry.
Check Customer Satisfaction
Read reviews from other customers to get a sense of an insurer's customer service and claims-handling process. Look for insurers who are praised for their responsiveness, transparency and fairness in dealing with claims.
Consult an Insurance Expert
Reach out to an insurance broker or agent. These professionals can offer personalized advice based on your specific needs. They can also help you understand the fine print of policies and find the best rates.
Even after you've been insured for a while, remember to review your policy regularly as your business needs may change over time. The right coverage now might not be the right coverage in a year.
Frequently Asked Questions About Professional Liability Insurance
Selecting a professional liability insurance policy is a pivotal decision for business owners. To help clarify the process, we've addressed key questions that often arise when choosing the best insurance coverage.
About Melissa Wylie
Melissa Wylie is a Content and SEO Manager at MoneyGeek. Melissa has worked in the financial content space since 2018 and has spent much of that time focused on all things small business.
Prior to joining MoneyGeek, Melissa held SEO positions at Bankrate and LendingTree. Melissa’s work has also appeared on LendingTree-owned websites ValuePenguin and MagnifyMoney.
Melissa began her career at American City Business Journals in 2015 as a reporter for the company’s women-focused publication Bizwomen. Melissa has a Bachelor of Arts in Journalism from the University of North Texas. Melissa relies on her foundation in journalism to craft content that simplifies complex financial topics to help everyone feel confident when making decisions with their money.
Melissa's other work can be read on LendingTree and Bizwomen.