Average Professional Liability Insurance Cost (2025)

Updated: October 16, 2025

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Professional Liability Insurance Costs: Key Takeaways

Professional liability insurance costs you $32 to $193 monthly, depending on your industry and location.

Your industry and location create the biggest differences in professional liability insurance rates, though coverage limits and claims history also impact what you'll pay.

You can lower the cost of professional liability insurance by choosing higher deductibles, comparing quotes from multiple insurers and paying your premium annually.

How Much is Professional Liability Insurance?

Small businesses typically pay $931 annually for professional liability insurance, based on our analysis of quotes from major insurers. Costs vary widely based on what you do and where you work. For instance, a home-based consultant pays $384 annually, while a mortgage broker faces $2,316 in premiums because financial mistakes hurt clients more.

Professional liability insurance (errors and omissions insurance (E&O) or professional indemnity coverage in some industries) covers you when clients claim your professional services cost them money. You'll want it alongside other coverage when building the best business insurance for your company.

LEARN MORE ABOUT PROFESSIONAL LIABILITY INSURANCE

Knowing how much professional liability insurance costs gives you a starting point for budgeting, but you should also learn what this coverage actually does and whether you need it for your business.

What Affects Professional Liability Insurance Cost?

Six factors control what you'll pay for professional liability insurance. Knowing these helps you budget for coverage and understand why quotes vary.

Industry Risk Level

Your profession creates the biggest differences in business insurance costs. Lawyers pay $146 monthly, while florists pay 74% less. Pricing mistakes rarely cost more than $100, but legal errors can cost clients hundreds of thousands.

Business Size and Employee Count

Adding employees pushes up your rates because more people can make expensive mistakes. A solo accountant pays $1,437 annually, while a 2-employee firm pays $315 more.

Geographic Location

Where you operate affects what insurers charge. Engineering firms in New Jersey pay $88 monthly, while those in North Dakota pay 23% less because of fewer lawsuits and cheaper legal costs.

Coverage Limits

Buying higher limits costs you more. Architecture firms pay $1,488 annually for standard $1 million coverage. Double that to $2 million, and your rate jumps 60% to $2,381 annually because insurers risk paying out more when claims happen.

Claims History

Expect higher renewal rates if you’ve filed claims before. A marketing agency with a clean record pays $1,188 annually. File one claim and you'll pay 25% more at renewal, and that increase sticks around for three to five years.

Annual Revenue and Project Values

Bigger revenue usually means pricier projects and higher premiums. A photography business earning $300,000 annually pays $768, while one earning $150,000 pays $614 - that's 20% less because smaller projects mean less financial risk when things go wrong.

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Industry

State

Average Cost for Professional Liability Insurance by Industry

How much professional liability insurance costs depends on your industry. Mortgage brokers pay 4.5 times as much as home-based businesses because they handle million-dollar transactions where documentation errors can cost clients their entire purchase.

Your costs will likely fall into one of three ranges. If you run a lower-risk business like a flower shop or home consulting, expect to pay $25 to $50 monthly. Contractors and tech professionals typically see $51 to $100 monthly. Financial advisors and lawyers face the steepest rates at $100+ monthly, which explains why they always look for affordable professional liability insurance.


Accountants	$145.90	$1,750.84
Ad Agency	$99.04	$1,188.44
Auto Repair	$82.42	$989.07
Automotive	$75.01	$900.15
Bakery	$52.87	$634.38
Barber	$42.77	$513.24
Beauty Salon	$49.06	$588.75
Bounce House	$59.12	$709.41
Candle	$41.80	$501.61
Cannabis	$122.35	$1,468.18
Catering	$79.16	$949.92
Cleaning	$54.64	$655.63
Coffee Shop	$60.99	$731.89
Computer Programming	$104.75	$1,256.95
Computer Repair	$62.67	$751.98
Construction	$76.76	$921.13
Consulting	$107.35	$1,288.16
Contractor	$63.25	$758.95
Courier	$49.79	$597.54
DJ	$45.46	$545.57
Daycare	$108.03	$1,296.35
Dental	$83.85	$1,006.14
Dog Grooming	$54.87	$658.39
Drone	$106.07	$1,272.80
Ecommerce	$61.57	$738.85
Electrical	$64.03	$768.32
Engineering	$103.98	$1,247.72
Excavation	$67.74	$812.83
Florist	$37.73	$452.74
Food	$110.07	$1,320.84
Food Truck	$59.03	$708.35
Funeral Home	$80.70	$968.44
Gardening	$40.05	$480.60
HVAC	$81.38	$976.51
Handyman	$54.27	$651.29
Home-based business	$37.11	$445.37
Hospitality	$73.55	$882.57
Janitorial	$49.74	$596.84
Jewelry	$61.22	$734.67
Junk Removal	$67.17	$806.06
Lawn/Landscaping	$51.37	$616.40
Lawyers	$145.53	$1,746.37
Manufacturing	$59.66	$715.93
Marine	$87.83	$1,053.96
Massage	$105.96	$1,271.51
Mortgage Broker	$166.04	$1,992.46
Moving	$81.72	$980.62
Nonprofit	$50.33	$604.00
Painting	$63.72	$764.65
Party Rental	$55.02	$660.28
Personal Training	$70.37	$844.48
Pest Control	$95.19	$1,142.25
Pet	$46.04	$552.53
Pharmacy	$57.32	$687.88
Photography	$63.74	$764.93
Physical Therapy	$94.28	$1,131.36
Plumbing	$89.69	$1,076.32
Pressure Washing	$57.38	$688.59
Real Estate	$125.45	$1,505.39
Restaurant	$81.66	$979.92
Retail	$54.80	$657.61
Roofing	$97.48	$1,169.75
Security	$99.79	$1,197.47
Snack Bars	$47.54	$570.50
Software	$94.89	$1,138.68
Spa/Wellness	$110.20	$1,322.39
Speech Therapist	$98.84	$1,186.10
Startup	$71.99	$863.89
Tech/IT	$98.26	$1,179.18
Transportation	$94.93	$1,139.21
Travel	$96.89	$1,162.66
Tree Service	$75.49	$905.84
Trucking	$111.11	$1,333.32
Tutoring	$60.67	$728.07
Veterinary	$115.93	$1,391.14
Wedding Planning	$76.74	$920.92
Welding	$76.92	$923.04
Wholesale	$61.59	$739.04
Window Cleaning	$62.37	$748.41

Note: We analyzed quotes from national insurers for small businesses with three employees, $300,000 annual revenue and $150,000 payroll. Your exact costs will depend on your business size, location, coverage limits and claims history. Get personalized quotes from insurers to see what you'll actually pay.

Average Professional Liability Insurance Cost by State

Where you operate affects how much you'll pay for professional liability insurance. Business owners in North Carolina pay around $804 annually, while those in New York and Pennsylvania pay $1,080 annually for identical coverage. That's a $276 difference.

States with more lawsuits and higher legal costs charge more for coverage. New York has frequent litigation that pushes rates higher. If you run a multi-state business, you can save money by establishing your headquarters in a lower-cost state when shopping for cheap business insurance.


Alabama	$77	$918
Alaska	$70	$840
Arizona	$74	$884
Arkansas	$74	$893
California	$87	$1,038
Colorado	$77	$923
Connecticut	$84	$1,014
Delaware	$83	$1,001
Florida	$84	$1,009
Georgia	$79	$948
Hawaii	$81	$967
Idaho	$73	$882
Illinois	$85	$1,025
Indiana	$76	$906
Iowa	$74	$886
Kansas	$75	$905
Kentucky	$73	$870
Louisiana	$88	$1,051
Maine	$68	$810
Maryland	$74	$889
Massachusetts	$82	$980
Michigan	$73	$880
Minnesota	$73	$875
Mississippi	$78	$934
Missouri	$77	$923
Montana	$77	$926
Nebraska	$73	$881
Nevada	$88	$1,061
New Hampshire	$77	$924
New Jersey	$88	$1,054
New Mexico	$78	$939
New York	$90	$1,077
North Carolina	$67	$807
North Dakota	$68	$810
Ohio	$72	$864
Oklahoma	$73	$877
Oregon	$72	$865
Pennsylvania	$90	$1,075
Rhode Island	$85	$1,024
South Carolina	$80	$959
South Dakota	$73	$872
Tennessee	$76	$909
Texas	$78	$939
Utah	$74	$889
Vermont	$75	$894
Virginia	$71	$850
Washington	$88	$1,061
West Virginia	$81	$978
Wisconsin	$76	$916
Wyoming	$72	$865
Grand Total	$78	$931

Note: We analyzed quotes from national insurers for small businesses with three employees, $300,000 annual revenue and $150,000 payroll. Your personalized quote will vary based on your business size, location, coverage limits and claims history. Speak with insurers to see what you'll actually pay.

Strategies to Lower Professional Liability Insurance Cost

You can cut your professional liability insurance costs through smart shopping and coverage decisions. Reduce premiums using these tips while ensuring you have enough financial protection:

1
Evaluate Your Coverage Needs
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.
2
Shop Multiple Providers
Insurers charge different rates for the same coverage. The Hartford offers some of the lowest rates at $864 annually, while NEXT charges $1,020 annually. Chubb costs the most at $1,068 annually for identical protection. Shopping around saves you up to $204 annually just by picking the right company.
3
Choose Higher Deductibles
Raising your deductible cuts your premium costs. Raise your deductible from $1,000 to $5,000 and save 10% to 15% annually. This change saves a business paying $1,200, $144 a year. Be prepared for the higher out-of-pocket cost if you need to file a claim.
4
Pay Annually Instead of Monthly
Monthly payment plans cost extra, usually 5% to 8% more than paying annually. Paying $1,200 annually saves you about $72, plus you avoid payment processing fees and lock in your full year.
5
Bundle Multiple Policies
Combine professional liability with other types of business insurance, and insurers typically give you 5% to 15% off. Bundle with general liability, cyber coverage or commercial property insurance to save money while building complete protection.
6
Maintain Clean Claims History
Your claims track record directly affects what you pay at renewal. A clean record for five years can cut your rates by 5% to 10%. Prevent problems by writing detailed contracts, keeping good records, and staying in regular contact with clients about project expectations. Compare options by getting coverage quotes from several insurers to find better rates.

Cost for Professional Liability Insurance: Bottom Line

Your industry and business size are the primary drivers of professional liability insurance costs, ranging from $32 to $193 monthly. You can manage your coverage costs by shopping around for quotes, choosing higher deductibles and paying annually for better rates.

Professional Liability Insurance Cost Chart

How Much is Professional Liability Insurance: FAQ

We addressed frequently asked questions most small business owners have about professional liability cost, coverage options and cost-saving strategies:

How much is professional liability insurance?

You're looking at $32 to $193 monthly, depending on your industry and location. Home-based consultants pay around $384 annually, while mortgage brokers spend $2,316 annually because financial mistakes hurt clients more.

Which industries pay the most for professional liability insurance?

Mortgage brokers get hit the hardest at $166 monthly because they handle million-dollar deals where one documentation mistake can cost someone their dream home. Financial advisors, lawyers and architects also pay premium rates because their advice carries serious financial weight.

How much does professional liability insurance cost by state?

Where you set up shop makes a real difference. North Carolina business owners pay around $804 annually, but you'll shell out $1,080 in New York and Pennsylvania for the same coverage. It comes down to how lawsuit-happy your state is and what legal costs look like. If you operate in multiple states, consider making your headquarters in a cheaper state.

How can I reduce professional liability insurance costs?

Bump your deductible from $1,000 to $5,000 and save 10% to 15% annually. Pay the whole year upfront instead of monthly to dodge those 5% to 8% processing fees. Bundle it with your general liability coverage for another 5% to 15% off. Shop around since different insurers offer rates of up to $204 annually for identical coverage.

How do employee counts affect professional liability insurance costs?

Every person you add to your team bumps up your rates because each one can make a costly mistake. A solo accountant pays $1,437 annually, but add one employee and you're paying $315 more. It's just the reality of increased liability exposure.

What coverage limits should I choose to control costs?

Start with $1 million per occurrence and $1 million aggregate (the total amount your policy will pay out over the policy period). It's solid protection without breaking your budget. Want to double that to $2 million? Your costs jump 60% higher. If you're managing million-dollar projects, you need the higher limits. But if you're a photographer or florist, the basic coverage usually does the job.

Is professional liability insurance worth the cost for small businesses?

Absolutely worth it. You're spending around $78 monthly, but a single client lawsuit can easily hit $50,000 in legal costs. Professional errors (missed deadlines, communication breakdowns or clients who aren't happy with your work) happen to everyone. Any of these situations can snowball into serious financial trouble without coverage.

How We Determined Professional Liability Insurance Costs

Our research focused on cost, analyzing the professional liability insurance premiums for small businesses across different industries and states.

Every quote used identical parameters to ensure fair comparisons:

Two employees (three people total, including the owner)
$150,000 annual payroll
$300,000 annual revenue
Already insured status

This profile represents small businesses requiring professional liability insurance in most states. We chose companies offering broad national coverage and online quote capabilities.

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.

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Professional Liability Insurance Cost