If your business provides professional services in Pennsylvania—whether in healthcare, legal, finance, or construction—you may be required to carry professional liability coverage. Known as errors and omissions insurance, this policy protects professionals from claims of negligence, misrepresentation, or service mistakes.
This guide explains who needs Pennsylvania professional liability insurance, what it covers, how much it costs, and how to handle claims under state laws.
Who Needs This Coverage in Pennsylvania
State law and licensing boards require many professionals to carry liability insurance. The exact coverage required depends on your profession.
Attorneys: Are not required to carry professional liability insurance, but must notify new clients in writing if they do not have coverage of at least $100,000 per claim and $300,000 aggregate annually.
Doctors and Surgeons: Must carry medical malpractice insurance totaling $1 million per occurrence/$3 million aggregate ($500,000 through private insurance plus $500,000 through the MCARE Fund).
Pharmacists: Must provide proof of $1 million in liability coverage to obtain authorization to administer injectable medications, biologicals, and immunizations.
Occupational Therapists: Must carry at least $1 million per occurrence in professional liability insurance to maintain licensure.
Physical Therapists: Must carry at least $1 million per occurrence in professional liability insurance to maintain licensure.
If you’re employed by a hospital or institution, your employer may provide coverage. However, independent professionals and contractors must obtain their own insurance.
Even when not legally required, consultants, architects, and small businesses often purchase E&O insurance for small businesses in PA to reduce legal and financial risks tied to service errors.
What E&O Insurance Covers
Errors and omissions insurance in Pennsylvania protects against claims that your work caused a client financial harm. This includes:
Defense Costs: Legal fees, court costs, and investigation expenses, even if you’re not found liable.
Settlements and Judgments: Pays damages to clients up to your policy limits.
Negligence Claims: Covers missed deadlines, bad advice, or service errors that result in loss.
Unlike general liability, E&O coverage focuses on mistakes in your professional work, not physical injury or property damage. Many client contracts require proof of E&O before services begin.
Common Claims and Industry Risks
Professional liability claims can affect any field where services or advice are involved. Some common examples include:
Medical Professionals: Claims may involve misdiagnoses, surgical errors, or medication mistakes. These often exceed $100,000 and can take years to resolve.
Lawyers: Missed deadlines, poor representation, or failure to disclose conflicts of interest can lead to lawsuits ranging from $50,000–$100,000.
Architects and Engineers: Design flaws, code violations, or project delays often result in claims that cost over $100,000.
Pennsylvania’s diverse climate and aging infrastructure increase risks. For example, structural engineers in Pittsburgh may face higher liability due to severe weather and urban renovation projects.
Many professionals confuse liability policies with workers’ comp. Our guide on whether workers’ compensation is the same as liability insurance explains the differences and why both may be essential.
Factors That Affect Professional Liability Insurance Costs in PA
Several key factors determine your professional liability insurance premiums in Pennsylvania:
Industry and Specialty Risk Level: High-risk professions like surgery, obstetrics, and construction face higher premiums due to greater liability exposure. Healthcare specialties with frequent patient contact or complex procedures typically cost more than administrative or consulting roles.
Business Size and Revenue: Larger practices with higher annual revenue generally pay more in premiums, as they face greater potential claim amounts. Solo practitioners and small firms often qualify for lower base rates.
Claims History: Your personal and business claims history significantly impacts pricing. A clean record with no prior claims can result in substantial discounts, while previous lawsuits or settlements increase premiums.
Coverage Limits: Higher policy limits ($2 million vs. $1 million per occurrence) increase costs but provide greater protection. The aggregate annual limit also affects pricing.
Geographic Location: Urban areas like Philadelphia and Pittsburgh may have higher rates due to increased litigation frequency and higher settlement amounts compared to rural Pennsylvania counties.
Years in Practice: Newer professionals often pay higher rates due to lack of experience, while established practitioners with long track records may qualify for experience discounts.
Risk Management Practices: Completing continuing education courses, maintaining proper documentation, and implementing safety protocols can qualify you for premium reductions with many insurers.
Pennsylvania Professional Liability Claim Process
If you face a claim or legal threat, follow these steps under the Pennsylvania professional liability claim process:
Notify Your Insurer Immediately: Report any incident, threat, or lawsuit. Waiting can void your policy.
Document All Details: Keep communication records, contracts, and service logs.
Participate in the Investigation: Your insurer will assign a legal team or adjuster to assess the situation.
Mediation or Court: Many cases settle before trial, but your insurer will defend you if needed.
Healthcare providers must notify their primary insurer immediately of any malpractice claims or potential claims. Prompt reporting is essential to ensure proper coverage and claim handling.
Bottom Line: Don't Risk Your License or Livelihood
From licensing mandates to lawsuit protection, Pennsylvania professional liability insurance is essential for many business owners. Failing to carry proper coverage can cost you clients—or your license.
Protect your business today:
- Confirm whether your license board requires liability coverage.
- Shop for a policy that meets state and client contract standards.
- If you’re a healthcare provider, ensure you have the required $500,000 primary insurance and MCARE Fund participation for total $1 million per occurrence/$3 million aggregate coverage.
- Report any possible claims promptly and follow all insurer guidelines.
Need help finding the right coverage? Call (855) 718-7552 to speak with an advisor.
