Professional liability insurance is often misunderstood because the losses it addresses are invisible. There’s usually no accident, no physical damage, and no obvious trigger—just a claim that your work caused financial harm. This coverage exists to address errors, omissions, and failures in professional services or advice . When businesses assume general liability insurance will handle these situations, they often discover the gap only after a claim has already formed. This page explains how professional liability insurance actually works, what it covers, where it stops, and how it fits alongside other core business insurance policies. What Professional Liability Insurance Is Designed to Cover Professional liability insurance responds to claims alleging that your professional services, advice, or failure to perform caused a financial loss to a client or third party. Coverage commonly applies to: Errors or omissions in professional services Negligence allegations related to advice or work performed Failure to meet professional standards Defense costs , even if a claim is unfounded Unlike general liability, these claims do not require bodily injury or property damage. Financial harm alone is often enough. Why General Liability Does Not Apply General liability insurance is designed for physical injury and property damage. It intentionally excludes most professional services. Common scenarios where general liability does not respond include: Incorrect advice or recommendations Design, consulting, or analytical errors Missed deadlines or contractual failures tied to services Software, technology, or data-related service failures Professional liability fills this gap by addressing losses that arise from what you do , not accidents you cause. Claims-Made Coverage: Timing Matters Most professional liability policies are written on a claims-made basis.