Professional liability insurance costs an average of $82 per month or $984 per year for small businesses.
Discover affordable professional liability insurance below.
Updated: August 14, 2025
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Professional liability insurance costs range from $25 to $193 monthly, depending on your industry and business size.
Several factors influence professional liability costs, but your industry and business size affect it the most.
Shopping around for quotes, choosing a higher deductible and paying annually helps you lower the cost of professional liability insurance.
Professional liability insurance costs small businesses an average of $82 monthly, but premiums range from $25 to $193, depending on your situation. We based these rates on quotes we analyzed for businesses with two employees earning around $300,000 annually and existing coverage.
Your actual premium depends on your situation. We'll explain what drives these differences and show how rates vary among industries and states.
We found that home-based businesses pay the least for professional liability insurance at $29 monthly ($352 annually) since they face fewer client interactions and smaller financial risks.Â
Mortgage brokers pay the most at $166 monthly ($1,996 annually) because they handle million-dollar deals where mistakes can cost clients substantial financial losses.
How Did We Determine These Rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on professional liability policies.
Location affects professional liability insurance costs. Our data shows Maine has the cheapest average monthly rate at $71 ($854 annually), while New York has the most expensive at $95 monthly ($1,135 annually). Maine's smaller business environment means fewer claims, while New York's competitive market and high business density lead to more lawsuits and higher costs.
| Alabama | $81 | $968 |
| Alaska | $75 | $903 |
| Arizona | $78 | $934 |
| Arkansas | $79 | $943 |
| California | $91 | $1,095 |
| Colorado | $81 | $976 |
| Connecticut | $89 | $1,067 |
| Delaware | $88 | $1,058 |
| Florida | $89 | $1,065 |
| Georgia | $83 | $1,000 |
| Hawaii | $86 | $1,034 |
| Idaho | $78 | $930 |
| Illinois | $90 | $1,080 |
| Indiana | $80 | $955 |
| Iowa | $78 | $934 |
| Kansas | $80 | $954 |
| Kentucky | $76 | $917 |
| Louisiana | $95 | $1,138 |
| Maine | $71 | $854 |
| Maryland | $78 | $938 |
| Massachusetts | $86 | $1,033 |
| Michigan | $77 | $929 |
| Minnesota | $77 | $923 |
| Mississippi | $82 | $985 |
| Missouri | $81 | $973 |
| Montana | $82 | $978 |
| Nebraska | $77 | $929 |
| Nevada | $93 | $1,121 |
| New Hampshire | $81 | $975 |
| New Jersey | $93 | $1,111 |
| New Mexico | $82 | $990 |
| New York | $95 | $1,135 |
| North Carolina | $71 | $851 |
| North Dakota | $71 | $853 |
| Ohio | $76 | $910 |
| Oklahoma | $78 | $931 |
| Oregon | $76 | $912 |
| Pennsylvania | $94 | $1,132 |
| Rhode Island | $90 | $1,080 |
| South Carolina | $84 | $1,011 |
| South Dakota | $77 | $920 |
| Tennessee | $80 | $959 |
| Texas | $83 | $990 |
| Utah | $78 | $940 |
| Vermont | $79 | $943 |
| Virginia | $75 | $896 |
| Washington | $93 | $1,119 |
| West Virginia | $86 | $1,031 |
| Wisconsin | $80 | $965 |
| Wyoming | $76 | $911 |
How Did We Determine These Rates?
These rates are for small businesses with two employees across 79 major industries or business types and focus solely on professional liability policies.
Your industry and business size have the biggest effect on the cost of professional liability insurance, but several others push up costs. Here's what affects your rate:
Your profession directly affects your premium because some jobs carry higher lawsuit risks. A financial advisor managing retirement accounts faces higher premiums than a photographer because investment mistakes can cost clients thousands.
The more people on your team, the more you expect to pay because the chances of someone making a mistake are higher. For instance, a solo consultant pays around $80 monthly, while larger firms pay more.
Coverage limits range from $250,000 to $2 million, with higher limits increasing your insurance cost. Many small businesses choose $1 million per occurrence (per claim) and $1 million aggregate limits (total annual coverage) for balanced financial protection, similar to the recommended coverage for general liability coverage.
Your professional liability cost increases if you have a history of claims against your business. Even one past claim can increase your premium compared to businesses with clean records.
Newer businesses have higher insurance costs than experienced companies because there's more risk of making a mistake when you're new. For example, a startup consulting firm might pay 20% more than a firm operating for five years.
Your business location impacts insurance costs because legal expenses vary between states. States with higher litigation rates have more expensive premiums than those with fewer lawsuits.
Bigger projects mean bigger premiums because there's more money at stake when things go wrong. A consultant implementing a million-dollar software system will pay more than someone building small websites.
Reduce your professional liability insurance cost in several ways. Here's how to find the cheapest business insurance coverage and save money:
Review whether you need professional liability insurance and the appropriate coverage limits for your business. Suppose you provide professional services or advice that could cause financial harm to clients. Professional liability insurance is important in that case, but you might not need the highest coverage limits.
Insurers offer different rates for the same coverage, so compare at least three options. This can help you save money and find cheap business insurance options that protect you from expensive bills.
Increasing your deductible (what you pay before insurance covers the rest) can reduce your premium costs, but you'll pay more out-of-pocket if you file a claim. For example, raising your deductible from $1,000 to $5,000 can lower your monthly premium.
Annual payments can save you money compared to monthly payment plans since insurers often reward upfront payments.
Combining professional liability insurance with general liability or other types of business insurance can lead to discounts. For example, you automatically save 10% if you combine more than one type of policy with NEXT Insurance.
Avoiding lawsuits through sound business practices keeps costs low. For instance, businesses with no claims for consecutive years often qualify for discounts.
Proper training programs, clear contracts and excellent client communication reduce your likelihood of claims. For example, documenting all client communications and setting clear expectations can prevent disputes that lead to lawsuits.
Gaps in professional liability coverage can result in higher premiums when you seek new insurance because insurers see interrupted coverage as riskier.
Professional liability insurance costs depend mostly on what kind of business you run and how big it is. Monthly premiums range from $25 to $193. Want to pay less? Get quotes from several insurers, pick a higher deductible or pay your full premium once a year instead of monthly.
MoneyGeek provides expert insights to frequently asked questions about the cost of professional liability:
We found that professional liability insurance costs small businesses an average of $82 monthly or $984 annually. Your actual cost varies based on industry, business size, location and coverage limits.
Mortgage brokers pay the most at $166 monthly because they handle million-dollar deals where mistakes can cost clients massive amounts. Home-based businesses pay the least, $29 monthly.
Maine has the cheapest professional liability insurance at $71 monthly because of fewer claims, while New York costs the most at $95 monthly because of higher lawsuit rates. Most states fall between these ranges.
Many small businesses choose $1 million per occurrence and $1 million aggregate limits for balanced coverage. High-value consultants managing million-dollar projects typically need higher limits than lower-risk businesses like photographers.
Shop around for quotes, choose higher deductibles and pay annually instead of monthly. Consider bundling your policies, maintain a clean claims history and keep continuous coverage.
Industry costs range from $29 to $166 monthly because some professions carry higher lawsuit risks. Industries that give direct advice or handle high-value deals typically pay more due to increased liability exposure.
Yes, paying $82 monthly is smart when a single lawsuit can cost tens of thousands in legal fees alone. Even frivolous lawsuits require expensive legal defense that far exceeds annual premiums.
Your claims history affects renewal rates because insurers see past claims as signs of future problems. Businesses with clean records qualify for discounts, while multiple claims can greatly increase premiums.
Yes, solo consultants typically need professional liability insurance, paying around $80 monthly for coverage. You can face lawsuit risks from client disputes, missed deadlines or professional errors that result in expensive legal costs.
We collected professional liability insurance quotes for small businesses across different industries and states to see what companies charge.
Our quote parameters:
This setup matches most small businesses that need professional liability insurance. We focused on insurers that sell policies nationwide and let you get quotes online.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
