What does professional liability insurance protect contractors against?

Professional liability insurance specifically protects contractors against claims that arise from negligence due to errors or omissions in their professional services. This type of insurance is essential for contractors who provide design, consulting, or advisory services, as it covers legal costs and damages associated with claims that their professional conduct didn’t meet the set standards or resulted in failure to execute their services competently.

In particular, this insurance helps mitigate the risk of being held liable for mistakes that may lead to financial loss for clients, such as poor design decisions or inadequate service delivery. By having this coverage, contractors can ensure that they are financially protected in the event a client sues for damages stemming from perceived professional negligence.

Other types of coverage, such as general liability insurance, would address concerns like injuries on job sites, property damage during construction, or natural disasters, but they do not specifically cover the risks associated with professional negligence in the execution of design or advisory roles.