Professional Liability for Consultants

Who this coverage is for

Consultants get sued when a recommendation produces a financial loss for the client — even when the recommendation was sound and the loss was caused by something else. PL is the line that defends the claim, pays settlement, and covers judgment up to the limit. We schedule consultants by practice area (management, marketing, IT, HR, strategy, operations) and ask about the largest project value during underwriting so the limit matches actual exposure.

Common claim examples

• Strategy recommendation produced a financial loss the client attributes to your guidance
• Marketing campaign claim of factual misrepresentation in client materials
• HR process change caused alleged wrongful-termination exposure
• Operations recommendation led to documented productivity loss
• Sub-consultant deliverable was alleged to be defective; client looked through to you

Claims-made structure

Professional liability is almost always written on a claims-made basis. The policy responds to claims first reported during the policy period (or extended reporting period) for incidents that occurred on or after the retroactive date. This is the opposite of occurrence-based GL — and the difference matters enormously for tail coverage when you change carriers.

Retroactive date and prior acts

The retroactive date is the earliest date for which a claim can trigger the policy. When you switch carriers, you typically want the new policy to honor your prior retroactive date so claims for old incidents (reported during the new policy period) are still covered. We confirm prior-acts coverage during the quote so there is no gap on your historical work.

What this coverage does NOT cover

• Bodily injury or property damage to third parties — that is general liability
• Employee injury — workers compensation
• Vehicle accidents — commercial auto
• Damage to your office or equipment — commercial property
• Intentional or fraudulent acts
• Claims arising before the retroactive date

What affects your premium

• Years of professional experience
• Annual gross billings or commissions
• Largest project value or transaction size
• Existing claims and prior incident history
• Use of subcontractors or sub-producers
• Coverage limits desired (commonly $1M, $2M, or $5M)
• Retroactive date desired (further back = higher premium but tighter coverage)
• State of operation and licensing status

Frequently asked questions