Professional services
Professional Liability Insurance Calculator
Works professional liability cost, where when the policy responds is the critical term.
Result
An estimating tool, not insurance advice and not a quote. Actual premiums are set by underwriting on factors no calculator sees: claims history, credit and loss data, exact location, construction, contract requirements and the insurer's own appetite. What cover you need is a question for a licensed broker who has looked at your situation. Professional liability covers claims arising from advice or services, including negligence and errors, where general liability does not. Most policies are claims made, meaning they respond to claims reported while the policy is live rather than to work done while it was, which makes continuous cover and tail cover important.
Get a Free Business AuditHow the calculation works
Revenue, profession and the limit chosen drive the premium, with annual and monthly cost and the share of revenue shown. Professional liability, also called errors and omissions, responds to claims arising from professional services, advice or design rather than to bodily injury and property damage, which is the general liability territory.
What moves the number
- Revenue and the nature of the services provided.
- Limit and deductible.
- Retroactive date, which determines how far back cover reaches.
- Claims history and the profession's loss experience.
Where this one goes wrong
Most professional liability policies are written on a claims-made basis, meaning they respond to claims made while the policy is in force rather than to work done in that period, and two terms follow from that. The retroactive date sets how far back prior work is covered, so changing insurer can cut off past work unless it is carried across. And when a practice closes or the cover ends, extended reporting period cover, often called tail cover, is what keeps past work protected. Both are worth asking about before buying rather than at the end.
Before you quote
- Check the retroactive date and carry it forward when changing insurer.
- Ask about extended reporting period cover before you need it.
- Confirm the services you actually provide are within the definition.
Questions
About this calculator
What does claims-made mean?
The policy responds to claims made while it is in force rather than to work done during that period. That makes two terms critical: the retroactive date, which sets how far back prior work is covered, and tail cover for after the policy ends.
What happens to past work if I change insurer?
It can be cut off, unless the retroactive date is carried across to the new policy. This is the most consequential detail in shopping professional liability and the one most often overlooked when comparing on premium alone.
How does this differ from general liability?
Professional liability responds to claims arising from services, advice or design, while general liability covers third party bodily injury and property damage. Many businesses need both, since neither responds to the other's claims.
The formula
premium = exposure / rate basis x rate x risk multiplier, less deductible credit, plus claims loading
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How to use this calculator
- Annual billings ($). Enter your own figure; the page starts at $420,000.
- Rate per $1,000 of billings. Enter your own figure; the page starts at 9.
- Risk classification. Enter your own figure; the page starts at Typical (1.0x).
- Deductible ($). Enter your own figure; the page starts at $2,500.
- Claims history loading (%). Prior claims increase the premium, sometimes sharply.
- Minimum premium ($). Enter your own figure; the page starts at $900.
The result updates as you type, so you can try a figure, see what it does to estimated annual premium, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Annual billings | $420,000 |
| Rate per $1,000 of billings | 9 |
| Risk classification | Typical (1.0x) |
| Deductible | $2,500 |
| Claims history loading | 0% |
| Minimum premium | $900 |
What comes out
| Result | Value |
|---|---|
| Estimated annual premium main result | $3,326 |
| Per month | $277.20 |
| Before loadings | $3,780 |
| Credit for the deductible | $453.60 |
| Effective rate on exposure | 0.79% |
Roughly $3,326 a year, about $277.20 a month, which is 0.79% of the exposure. Underwriting will move this considerably.
How sensitive the answer is
Holding everything else steady and changing only annual billings, this is what happens to estimated annual premium. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Annual billings ($) | Estimated annual premium |
|---|---|
| $210,000 | $1,663 |
| $315,000 | $2,495 |
| $420,000 example above | $3,326 |
| $630,000 | $4,990 |
| $840,000 | $6,653 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Annual billings ($)
- A money amount, starting at $420,000.
- Rate per $1,000 of billings
- A number, between 0 and 500, starting at 9.
- Risk classification
- Choose from Low risk (0.75x), Typical (1.0x), Higher risk (1.6x), High hazard (2.5x).
- Deductible ($)
- A money amount, starting at $2,500.
- Claims history loading (%)
- Prior claims increase the premium, sometimes sharply.
- Minimum premium ($)
- A money amount, starting at $900.
What the results tell you
| Result | What it is |
|---|---|
| Estimated annual premium | The headline result. A money figure. |
| Per month | A money figure. |
| Before loadings | A money figure. |
| Credit for the deductible | A money figure. |
| Effective rate on exposure | A percentage. |
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