Professional Liability

Questions

• Are IT consulting businesses required to carry insurance?

  Not by any statute aimed at IT consulting. The legal mandates that exist are generic — workers' compensation and related coverage once you have employees, commercial auto for business vehicles. Everything else is required by contract: client MSAs and vendor-onboarding rules that demand E&O, cyber, and general liability before you start billable work.

• Cyber insurance vs tech E&O — what is the difference?

  Different failures, different plaintiffs. Tech E&O responds when your technology work fails a client — missed specs, software errors, a project that never ships. Cyber insurance responds when data or systems are compromised, paying breach response and privacy liability. Most technology businesses need both, increasingly bought as one blended policy from a single carrier.

• Do consultants need E&O insurance?

  Usually yes — not by law, but because the two forces that matter point the same way: client contracts increasingly require E&O before you can sign, and general liability explicitly won't cover what consultants actually get sued over — advice and work product that costs a client money. If your recommendations drive client decisions, E&O is the policy that responds.

• Do I need E&O insurance as a notary?

  Not to get commissioned — states mandate a surety bond, not E&O insurance. But the bond protects the public from your mistakes, and if it pays a claim you are required to pay the surety back. E&O is the optional policy that actually protects the notary. Bonded and insured are not the same thing.

• Do I need malpractice tail coverage?

  Only if you are leaving a claims-made policy without something else covering your prior acts — that is the entire test. Occurrence policies have the tail built in. For employed physicians the practical question is who pays for it, and the AMA's advice is to settle that in the employment contract, not at resignation.

• Do I want claims made or occurrence malpractice?

  If occurrence coverage is offered for your specialty and market, it is the simpler buy — tail coverage is built in, so changing jobs or retiring costs nothing extra. Claims-made works just as well on one condition: who pays the tail must be settled in writing before you sign, not negotiated at departure.

• Do personal trainers need insurance?

  Yes, in practice. The mandate rarely comes from a statute — it comes from the gym that won't let you on the floor without a certificate of insurance, and from the fact that an injured client can sue you personally. An accident and bad programming are two different suits, answered by two different liability lines.

• Do realtors need E&O insurance?

  It depends on your state. Roughly a dozen states make E&O coverage a condition of holding a real estate license — Tennessee's statute says licensees "shall, as a condition to licensing, carry errors and omissions insurance." Everywhere else the mandate usually comes from your brokerage. Either way, the working question is what the policy excludes.

• Do we need career coverage on our professional liability policy?

  Usually yes, once your firm has changed carriers, merged, or hired laterally — but not for the reason most quotes imply. Career coverage (also called prior acts or nose coverage) isn't about who's leaving; it's about whether your current policy's retroactive date actually reaches back far enough to cover work your attorneys already did. Long, uninterrupted tenure with one carrier can make it unnecessary; anything else usually can't.

• What actually triggers an E&O claim against a real estate agent?

  Rarely a clear mistake. Most claims surface after closing — a buyer discovers a property restriction, a disclosure dispute resurfaces, or a repair disagreement drags on — and the agent followed the checklist the whole time. The legal bill starts once a complaint is filed, regardless of who's ultimately right. Small documentation errors (a missed signature, a slipped deadline) are the other steady source, precisely because they're easy to miss and easy to blame after the fact.

• What does tech E&O insurance cover?

  Tech E&O covers third-party claims that your technology product or service failed someone who paid for it: negligence, failure to perform, software errors that cost a client money, and on many forms copyright and defamation claims. It does not cover bodily injury, property damage, or your own breach-response costs unless cyber coverage is attached.

• What insurance do startups need to close customer contracts?

  Usually tech E&O and cyber, plus general liability when a lease or vendor agreement demands it — but the authoritative answer is in the contract itself. Enterprise customers in B2B, SaaS, and regulated industries make E&O and cyber a condition of signature, and the certificate of insurance is effectively a closing document.

• What insurance does a massage therapist need?

  Professional liability (what therapists call malpractice) plus general liability — and in this field both usually arrive as one association membership, not a standalone policy. AMTA and ABMP memberships include the coverage, which is how most working therapists buy. The real decisions are individual versus shared limits, employer-coverage gaps, and additional-insured demands from landlords.

• What is claims made vs occurrence?

  They are the two ways a liability policy decides which policy year answers a claim. An occurrence policy covers incidents that happen while it's active, no matter when the claim arrives — even years after cancellation. A claims-made policy covers claims filed while it's active, which makes canceling one dangerous without tail coverage.

• What is tail coverage?

  Tail coverage is the industry nickname for an extended reporting period — the same product, not two competing ones. It extends your window to report claims after a claims-made policy ends, for work performed while the policy was active. It never covers new work, and occurrence policies never need it at all.

• What type of business insurance do I need for my consulting business?

  Professional liability (E&O) is the anchor — it answers the claims consulting actually generates. General liability gets added early because client offices and vendor-onboarding portals demand it, cyber joins once client data touches your systems, and workers' comp becomes statutory with your first hire. Let your client contracts, not a product menu, set the list.