Professional Liability (E&O) Insurance for Service Firms

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Understanding Professional Liability

When a consulting firm in downtown San Francisco, Bay Area, a law practice in North San Francisco, Bay Area or a tech-services startup in Mountain View gives advice or delivers a service, they carry a distinct risk: allegations of negligence or inadequate work. Professional liability insurance (also called errors & omissions) provides financial protection and legal defense when clients claim you caused them a loss.

Why Your Firm Needs It

Unlike general liability coverage, which addresses physical injury or property damage, E&O addresses lawsuits tied to service delivery—missed deadlines, faulty advice, technical errors or breach of contract. In the Silicon Valley and Bay Area marketplace, where technology, consulting and legal services dominate, the right E&O policy can be critical for maintaining credibility and continuity.

How We Assist Your Firm

At Shepherd & Associates, we help identify your firm’s risk profile, select appropriate limits and negotiate terms that reflect your client contracts. We also help ensure required conditions—such as retroactive dates, claims-made wording, and tail coverage—are clearly addressed. For clients moving into larger engagements (e.g., series-A funding rounds or nationwide work), we anticipate the extra scrutiny and help you prepare in advance.

Professional Liability FAQs

  • Is E&O the same as malpractice insurance?

    For professions like law or medicine the terms may overlap, but E&O is the commonly used term for service firms—covering negligent acts, errors or omissions in service delivery.

  • How much coverage do we need?

    Limits vary widely depending on firm size and nature of work; many smaller firms begin with $500k–$1m limits, scaling upward as exposures grow.

  • Does E&O cover bodily injury?

    No—it covers financial losses from services rendered; bodily injury is handled under general liability or workers’ compensation.

  • Why is the policy “claims-made”?

    Because it covers acts committed during the policy period even if a claim is made later—but you must maintain continuous coverage or purchase tail coverage when you change insurers.

Let’s Review Your E&O Gap

If your firm serves clients in the Bay Area or nationally and you don’t yet have adequate professional liability protection, we can help evaluate your exposure and recommend tailored coverage.

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