Average Professional Liability Insurance Cost (2026 Report)

Average professional liability insurance costs range anywhere from $19/mo to $166/mo. Most small businesses pay between $30/mo to $70/mo, but pricing can vary widely depending on industry, business size and location.

Learn more about professional liability policy costs nationally, the cost factors that affect your rate and how you can lower premiums in our report below.

Written by Angelique Palenzuela-Cruz

Updated: March 5, 2026

Advertising & Editorial Disclosure

How Much Does Professional Liability Insurance Cost on Average?

At the national level, professional liability insurance costs sit at $56/mo or $675/yr on average for a 1-to-4-person small business getting a $1 million per claim and $2 million aggregate policy.

This average price is aggregated across 151 industries and all states and territories in the United States we studied that represent most small companies that need coverage based their actual service risk. Keep in mind this national cost may not apply to you and it should be used as a starting point rather than an actual quote.

For more personalized estimates, you can use our professional liability insurance cost calculator below.

Professional Liability Insurance Cost Estimate Calculator

Select your industry area, location and business size (employee count) to get a personalized professional liability insurance cost estimate. Rates are calculated based on a $1 million per claim and $1 million aggregate policy.

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Monthly rate estimate—

To estimate average professional liability insurance costs, we analyzed quote data from major U.S. small business insurance providers and modeled standardized premium estimates across common professional service profiles. These modeled results are designed to provide a consistent national benchmark and show how premiums vary by key baseline factors including business size, profession type, and location.

Dataset Scope and Assumptions

Our cost modeling uses standardized inputs for consistent comparisons across businesses.

Providers analyzed: 10 major insurance providers
Professions covered: 151 professional service categories
Geography: all U.S. states (including Washington, D.C.)
Employee count bands: solo practitioners, one to four, five to nine, 10 to 19, and 20 to 49 employees
Policy baseline: standard errors & omissions (E&O) / professional liability policy with $1 million per claim / $1 million aggregate limits
Total estimates modeled: just over 1 million standardized pricing estimates

We also incorporated modeled average revenue, payroll, and claims history personalized across all combinations of states, profession type, and employee counts to improve the accuracy of pricing. To model these assumptions against our cost factors, we used data from these sources:

CBP (for employee size class density by state + NAICS)
QCEW (for wage/payroll intensity by profession + geography)
Economic Census / SUSB (for receipts/output intensity by profession)
Calibrated against:
- Private comp databases
- IRS SOI totals

How We Calculated Average Professional Liability Costs

Our published averages represent modeled premiums for standardized professional service profiles and were aggregated in two ways:

National benchmark average: The national average cost reflects the modeled premium for a standardized one to four-employee professional services business across all professions and states included in our dataset for a standard professional liability policy.
Segment averages: To show how costs vary, we calculated average modeled premiums for our national base profile and isolated for variables, including:
- Employee count (business size ranges)
- Profession / industry categories
- States (including Washington, D.C.)

Segment averages were produced by aggregating modeled pricing trends across the full dataset so readers can compare how premiums shift across profession types and regions.

SEEING THE TERM ERRORS AND OMISSIONS ON YOUR CONTRACT?

That's the same coverage under a different name, commonly used in tech, real estate, and financial services. See our E&O insurance cost page for more industry-focused pricing on these areas.

What Factors Affect Professional Liability Insurance Costs

The main factors that affect your professional liability insurance costs as currently and as your business grows are your industry, location and employee count. All of these details together influence the possible frequency of claims and the possible severity involved regarding errors/omissions in professional work, faulty advice given and failures to follow through with contractual obligations.

Our costs models follow these factors as the core of our professional liability pricing analysis. Below we explain each of these factors, why they influence costs and how much we found they affected them.

Industry Area

Your industry is the strongest baseline factor in determining your professional liability insurance cost. This is primarily due to your area of work determining the types of services you provide and as such determines the damage you can do to clients and customers for not fulfilling contractual obligations, providing faulty advice or making professional mistakes/omissions.

In our study, cleaning services have the lowest average costs sitting 67% below the national average due to most risks being related to bodily injury or completed operations coverage for general liability policies. On the opposite end, childcare services are the highest cost industry area at 195% above average due to the vast majority of lawsuits being about negligence in regard to client's children.

Business Size

Your business size or number of employees is the second most influential factor that affects your professional liability premiums. The logic behind this is simple, the more people that can make professional mistakes the higher pricing will be. As businesses grow larger, it is also harder to manage service quality which often causes more professional mistakes and negligence to happen.

Compared to a 1-to-4-person business, a 20 to 49 employee business is 75% higher on average to insure with a professional liability policy.

Location

State is the least influential of our baseline factors affecting professional liability costs. It's determining factors are much more indirect and relate to the differing legal environments in states in regard to settlement amount and likelihood of higher cost and nuclear verdicts.

The spread was tight in our study and the lowest cost state was only 11% lower than national benchmarks (North Dakota) while the highest cost state sits only 15% higher (New York)

Average Professional Liability Insurance Cost By Industry

At the general industry area level, you can expect professional liability insurance rates to range the most from $19/mo for cleaning services to $166/mo for childcare services. Based on our study the distribution of pricing is as follows:

Low-cost industries (20%+ below national average): 15 of 25 industries (60%)
Mid-cost industries (within ±20% of national average): 4 of 25 industries (16%)
High-cost industries (20%+ above national average): 6 of 25 industries (24%)

The vast majority of industries (76%) are either within the average for below average for professional liability policy premiums. For the few industry areas that are well above average childcare services are the most expensive by a long shot, with rates that are 82% higher than the 2nd most expensive industry. For the other runner ups, financial services, construction/contracting, education and tech round out the top 5 most expensive general industries for professional liability insurance.

Below you can explore where your small business stands for professional liability insurance costs by filtering the table below.

Data filtered by:


Cleaning Services	$19	$224	67%	1
Fitness Services	$30	$365	46%	2
Pet Care Services	$31	$377	44%	3
Beauty, Body & Wellness Services	$34	$403	40%	4
Nonprofit & Associations	$38	$452	33%	5
Marketing & Communications	$39	$468	31%	6
Arts, Media and Entertainment	$39	$471	30%	7
Healthcare & Medical	$43	$515	24%	8
Other Professional Services	$47	$569	16%	9
Recreation and Sports	$51	$608	10%	10
Consulting Services	$51	$610	10%	11
Hospitality, Travel & Tourism	$52	$622	8%	12
Real Estate & Property Services	$73	$874	-29%	13
Tech/IT	$74	$888	-31%	14
Education	$74	$890	-32%	15
Construction & Contracting	$84	$1,010	-50%	16
Financial Services	$91	$1,095	-62%	17
Childcare Services	$166	$1,988	-195%	18

Average Professional Liability Insurance Cost By Business Size

The relationship of employee count and professional liability insurance costs is much more linear than industry. The largest jump happens when you hire your first employee with sole proprietors paying $18 or 32% more a month ($38/mo vs. $56/mo). Then the professional liability pricing increases start flattening out as more employees are hired after this point sitting around a 20% to 21% increase as you move up employee count bands.

Professional Liability Insurance Cost Chart

Average Professional Liability Insurance Cost By State

Professional liability insurance costs operate on the tightest spread by state ranging from $50 a month in North Dakota towards the high end of $65/mo in New York. So, at most you'll see single digit shifts based on your state from average that are no more than $9 higher or $6 lower per month.

This distribution is the most normalized (bell curved) out of the baseline factors we studied for professional liability insurance with the vast majority of states being within 10% of the average (45 out of 51 states/territories). The only areas of the country that break this pattern are North Dakota, Pennsylvania, New Jersey, California, Washington D.C. and New York.

Data filtered by:


Alabama	$54	$653	3%	22
Alaska	$54	$645	5%	17
Arizona	$55	$657	3%	24
Arkansas	$53	$639	5%	12
California	$63	$760	-13%	49
Colorado	$56	$673	0%	31
Connecticut	$60	$722	-7%	41
Delaware	$59	$703	-4%	37
Florida	$61	$731	-8%	42
Georgia	$58	$693	-3%	36
Hawaii	$59	$704	-4%	38
Idaho	$53	$638	5%	11
Illinois	$61	$734	-9%	43
Indiana	$54	$652	3%	21
Iowa	$53	$638	5%	10
Kansas	$54	$644	5%	16
Kentucky	$53	$633	6%	6
Louisiana	$62	$741	-10%	46
Maine	$51	$609	10%	2
Maryland	$55	$662	2%	28
Massachusetts	$59	$708	-5%	39
Michigan	$54	$648	4%	19
Minnesota	$54	$645	4%	18
Mississippi	$57	$683	-1%	32
Missouri	$55	$662	2%	29
Montana	$55	$654	3%	23
Nebraska	$53	$634	6%	7
Nevada	$61	$737	-9%	44
New Hampshire	$55	$660	2%	27
New Jersey	$63	$757	-12%	48
New Mexico	$56	$668	1%	30
New York	$65	$777	-15%	51
North Carolina	$51	$614	9%	3
North Dakota	$50	$600	11%	1
Ohio	$53	$641	5%	13
Oklahoma	$53	$637	6%	9
Oregon	$54	$649	4%	20
Pennsylvania	$63	$754	-12%	47
Rhode Island	$60	$718	-6%	40
South Carolina	$57	$684	-1%	33
South Dakota	$53	$632	6%	5
Tennessee	$55	$657	3%	25
Texas	$58	$692	-3%	35
Utah	$53	$641	5%	14
Vermont	$54	$643	5%	15
Virginia	$53	$635	6%	8
Washington	$61	$737	-9%	45
Washington DC	$64	$766	-14%	50
West Virginia	$57	$684	-1%	34
Wisconsin	$55	$659	2%	26
Wyoming	$52	$627	7%	4

How To Lower Professional Liability Insurance Costs

Any business can lower their professional liability insurance premiums with both quick and sustained efforts. Below we break down the practical methods you can take to ensure you're getting the lowest costs possible without compromising the coverage you need.

Quick Professional Liability Cost Lowering Methods

You can use these quick methods to lower your costs for professional liability insurance.

1
Provide clean and accurate underwriting information
The easiest way to save the most on any business insurance, including professional liability insurance, is by making sure your company is classified correctly. This means ensuring that the industry codes, revenue, payroll, employee count, claims information, and operations descriptions are properly detailed so insurers can price most accurately. Having an improper industry code is the most common issue here and a mistake can influence rates by more than 30%.
2
Determine how much professional liability insurance you need
Finding out how much professional liability insurance is needed for your small businesses sets you up to not overpay for coverage or exclude it entirely from consideration based on your actual risk. Consider the work you do and whether it lines up with what professional liability policies cover, the value of and types of clients/customers you have, and the legal environment surrounding your profession and work case scenarios.
3
Only get minimum required professional liability insurance
If you can't afford the coverage you need, going with minimum professional liability insurance requirement amounts is the right choice. Ensure you meet state licensing requirements and any terms present in client contracts, so you are compliant.
4
Compare multiple insurers
We found that it is possible to get savings of over 40% on average if you compare multiple providers and find the cheapest for your profile. When getting quotes, make sure you compare 3 to 5 providers that you shortlist based on affordability, customer experience and coverage to get the best deal.
5
Bundle professional liability insurance with other policies
Bundling on average saves you anywhere from 10% to 15% on average. So when getting any business insurance policy, consider bundling policies together with professional liability insurance with the same company.
6
Pay annually instead of monthly
Especially as policy premiums go up as your business grows, paying annually for professional liability and other business insurance types can save you money. Often savings are between 5% and 10%, but can reach higher depending on the total cost of your policy.

Long-term Professional Liability Cost Lowering Strategies

These long-term cost lowering strategies will help ensure your professional liability insurance rates are cheap over time.

Claims frequency and severity are the most direct drivers of professional liability pricing. Even a single large claim can follow your firm for three to five years. Preventing formal claims or managing them quickly when they arise builds the loss history insurers reward.

Key actions:
- Resolve client disputes early. Address dissatisfaction before it escalates into a formal E&O claim. A proactive call or written clarification is far cheaper than a claims investigation.
- Document all client communications. Written confirmations of scope changes, approvals, and advice given protect you if a claim surfaces months or years later.
- Track near-misses internally. Log errors that didn't result in claims so you can identify patterns and close gaps before insurers see a pattern in loss runs.
- Report potential claims immediately. Most professional liability policies require timely notification. Late reporting can jeopardize coverage and signal poor risk management to underwriters.
What to expect: A three- to five-year window of clean loss runs typically unlocks meaningful premium credits and broader underwriting flexibility at renewal.
Most professional liability claims trace back to misaligned expectations, undocumented scope, or clients with unrealistic assumptions. Insurers view firms with rigorous intake and engagement processes as materially lower risk and price accordingly.

High-impact controls:
- Use detailed written engagement letters: Clearly define scope, deliverables, limitations, and client responsibilities. Vague or verbal agreements are a leading driver of disputes.
- Screen new clients for risk: A simple intake checklist regarding complexity of matter, litigation history, financial stability, and red-flag behaviors helps you decline or price risky work appropriately.
- Document scope changes in writing: When a project evolves, confirm the new scope and any fee impact in a written amendment. Undocumented scope creep is a claims magnet.
- Formalize disengagement procedures: Failing to properly close out a client relationship, including written termination letters where appropriate, can extend professional duty long after work has stopped.
Why it matters: Underwriters directly ask about engagement letter practices and client vetting during quoting. Strong controls can shift your firm from a standard to a preferred risk tier.
Professional liability claims often stem from errors made under time pressure, incomplete supervision, or staff operating outside their competency. Consistent training and internal review processes reduce the frequency of the mistakes that turn into claims.

High-impact controls:
- Require continuing education relevant to your practice: Staying current on standards, regulations, and industry changes reduce technical errors and demonstrates competence to insurers.
- Implement peer review for high-stakes work: A second set of eyes on complex deliverables before they go to clients catches errors that solo review misses.
- Establish workload limits for key staff: Overloaded professionals make more mistakes. Insurers in some professions specifically ask about capacity management practices.
- Maintain clear supervision structures: Junior staff working without adequate oversight is a consistent theme in E&O claims, particularly in growing firms.
Why it matters: Insurers evaluate the depth of your quality control framework, especially as your firm grows. Documented processes signal that growth won't outpace your risk management.
Beyond reducing risk, how your coverage is structured affects what you pay. As your loss history improves, there are often opportunities to restructure deductibles, limits, and policy terms to reflect your actual risk profile rather than default assumptions.

Coverage levers:
- Raise your deductible as your cash position allows: Higher deductibles lower premiums significantly. If you've built reserves and have a clean loss history, retaining more first-dollar risk is often economically favorable.
- Align limits with actual exposure: Over-insuring is common. Periodically review whether your limits reflect your largest realistic claim scenario, not an inflated worst case.
- Leverage loyalty and long-term carrier relationships: Admitted carriers often offer longevity credits after sustained years without claims. Switching carriers too frequently forfeits this benefit.
- Ask about risk management credits: Many insurers offer explicit premium credits for firms that complete approved risk management training or implement documented quality programs.
What to expect: Policy structure improvements compound with improved loss history. Working with a broker who specializes in professional liability ensures these opportunities are actively pursued at each renewal.

Professional Liability Insurance Cost: Bottom Line

Professional liability premiums are personal, and they reflect how insurers read your firm's specific risk: what you do, who your clients are, your location's legal environment your claims history, and the systems you have in place to prevent errors.

A national average is only useful as a starting point. What matters is understanding where your premium sits relative to your actual risk profile, and why.

Apply this report by asking three questions:

Does my premium reflect my actual risk: Consider your profession, services offered, client types, revenue, and claims history, not just whether your number is above or below average.
What is driving my cost right now: Separate baseline risk factors (profession, business size, state, prior claims) from coverage design choices (limits, deductible, retroactive date, tail coverage). Each requires a different response.
What would meaningfully change my price and over what timeline: Some levers work at the next renewal; others compound over years. Knowing which is which helps you prioritize.

Use this frame to evaluate quotes and coverage options based on whether they accurately reflect your risk profile, not just whether the number feels high or low. The goal isn't the cheapest policy, it's the right coverage, with the best provider, at a price that reflects how well-run your service actually is.

Professional Liability Insurance Cost: Next Steps

Now that you have a baseline understanding of what professional liability insurance may cost for you, we recommend starting to shortlist providers to compare both by pricing efficiency and overall value. So below, you can start exploring the best and cheapest professional liability insurers with our resources:

Once you look into this, getting professional liability insurance quotes to verify our lists fit your business is the best next step after. We've also left some other advice and information below to help you depending on your needs and specialized situations.

If you're interested in other business insurance policy costs

We've left resources below for average costs for common business insurance policies:

If you don't have coverage yet

Get at least three quotes before buying. Prices vary significantly across carriers for the same profession, and your first quote is rarely your best.

If your renewal is coming up

Start shopping 60 days out, not 30. Waiting until the last minute forces rushed decisions and weakens your negotiating position.

If you've added services or grown significantly since your last policy

Notify your broker before renewal, not after. Undisclosed material changes can void coverage at the worst possible time.

If your premium feels too high

Ask your broker to remarket the policy at least once every two years. Loyalty rarely earns discounts in professional liability, but competition between carriers does.

If you just had a claim

Don't switch carriers immediately to escape the premium impact. Switching can create gaps in your retroactive date coverage that leave past work exposed.

If you're changing carriers or closing your business

Purchase tail coverage before your current policy lapses. Claims-made policies cover nothing after expiration without it, even for work completed years ago.

Get Quotes From Your Top Professional Liability Insurer

Select your industry and state to get a customized professional liability insurance quote from your top insurer.

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About Angelique Palenzuela-Cruz

Angelique Palenzuela-Cruz is a Content Writer at MoneyGeek specializing in business insurance. She focuses on general liability, workers' compensation and professional liability coverage, helping small business owners cut through policy jargon and understand what they're actually buying.

Angelique has spent over five years reporting on personal finance, with deep experience in both insurance and lending markets. Her psychology background also gives her a unique understanding of how people actually process difficult financial decisions, allowing her to meet readers where they are, simplify complex concepts and build decision making frameworks that give them confidence. Whether you're learning about policies, comparing providers or trying to figure out requirements, Angelique does the legwork, digging into regulations, analyzing policy language and testing her explanations against agent-level standards so you get straight answers without fluff.

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Average Professional Liability Insurance Cost (2026 Report)

How Much Does Professional Liability Insurance Cost on Average?

Our Methodology

What Factors Affect Professional Liability Insurance Costs

Average Professional Liability Insurance Cost By Industry

Average Professional Liability Insurance Cost By Business Size

Average Professional Liability Insurance Cost By State

How To Lower Professional Liability Insurance Costs

Quick Professional Liability Cost Lowering Methods

Long-term Professional Liability Cost Lowering Strategies

Professional Liability Insurance Cost: Bottom Line

Professional Liability Insurance Cost: Next Steps

Get Quotes From Your Top Professional Liability Insurer