Professional Liability (Errors and Omissions) Insurance in Connecticut: Who Needs It and How Claims-Made Coverage Works

Short answer: Professional liability, also called errors and omissions (E&O), covers claims that a mistake, oversight or failure in your professional work caused a client a financial loss, plus your defense. General liability does not cover these claims. Consultants, IT firms, architects, engineers, real estate professionals, accountants, financial advisors, marketing agencies and many others in Connecticut carry it, often because clients require it. It is almost always written on a claims-made basis.

What professional liability covers

• Negligence, errors and omissions in professional services
• Failure to deliver services as promised or by a deadline
• Misrepresentation and inaccurate advice
• Defense costs, which in professional claims are often the largest part of the loss

It does not usually cover bodily injury or property damage (that is general liability), intentional or fraudulent acts, contractual guarantees beyond what the law would impose, or fines and penalties.

Who needs it in Connecticut

• Consultants and IT providers whose work affects a client's revenue, systems or data
• Architects and engineers, for whom design errors can be catastrophic
• Real estate agents, appraisers and property managers
• Accountants, bookkeepers and tax preparers
• Insurance and financial professionals
• Marketing, design and staffing firms
• Contractors with design responsibility, such as design-build firms

Connecticut does not impose a single statewide E&O mandate across professions, so the practical drivers are client contracts, licensing or association rules for specific professions, and the size of the financial loss a mistake could cause.

Claims-made coverage, retro dates and tails

Most E&O policies are claims-made: they cover claims first made against you during the policy period, for work performed after the policy's retroactive date. Three practical consequences:

• Keep the retro date when you switch carriers. A new policy with a new retro date leaves past work uninsured.
• Report potential claims promptly. An unhappy client's email threatening action is often a reportable circumstance.
• Buy a tail (extended reporting period) when you retire, sell or close. Claims about past work can arrive years later.

Limits and cost

Many Connecticut clients require $1 million per claim. Pricing depends on profession, revenue, contract types and claim history; low-risk consultants may pay several hundred dollars a year, while design professionals pay considerably more. Defense costs may sit inside the limit ("eroding"), so a $1 million policy can shrink quickly in a contested claim. Ask whether defense is inside or outside limits.

Related coverage

• Cyber liability for data breaches and ransomware, often paired with tech E&O
• EPLI once you have employees
• D&O for boards and investors

New England Insurance, an independent Connecticut agency in Bridgeport since 2012, places professional liability for Connecticut firms. Request a review or see professional liability.