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Why does my small business need professional liability insurance?

You’re about to land a big account and the potential new client suddenly asks if you have professional liability insurance. Are you covered for errors and omissions? If you’re not sure, keep reading!

With so many different areas to manage as a self-employed consultant or small business owner, professional liability insurance may not be the first thing on your mind, but it’s a key consideration for conducting business in British Columbia.

Professional liability insurance is designed to cover you specifically from making an error of failing to provide a service that causes a financial loss to another, but it’s not the only insurance you may carry for your business. It's helpful to know what it's intended to cover in comparison to commercial general liability insurance.

Whether you’re a consultant, creative or professional, many clients will require you to have professional liability insurance before they employ your services. It’s also important for protecting your business.

Commercial general liability insurance vs. professional liability insurance

Commercial general liability insurance provides coverage for bodily injury or property damage to third parties (for example, if a customer slips and falls on your premises), but if a mistake made by you or an employee causes a customer financial loss, that’s where professional liability insurance can help you.

While commercial general liability insurance is important to protect you and your business, professional liability insurance is a valuable complement to make sure your primary risks are covered.

Why your small business needs professional liability insurance

If you offer a professional service or are a consultant, you need professional liability insurance. Any business providing professional services can be accused of negligence, providing poor advice, or failing to provide a service as promised. This may happen more often than you think and could put your business at risk. Professional liability insurance can protect you from the financial hardship of lawsuits against your business – whether they are your fault or not.

In fact, to land jobs and projects in BC, small businesses, freelancers and professional consultants are increasingly asked to carry professional liability insurance. And that’s a good thing for you and the client.

Every self-employed creative, consultant or small business owner hopes that their client will receive excellent service and be satisfied (if not more) with the results of your work, but miscommunication and accidents are realities of any business.

Here’s a real world example: a website designer missing a 0 in a client’s digital advertising for a product promotion could result in the client having to honour the sale and suing the designer for the difference in price. This is where professional liability insurance can help.

Graphic designer discussing images with client

How BCAA Small Business Insurance with Professional Liability can support you

You need to protect your business from the start to the finish of every project, maintain satisfied clients and protect your hard-earned professional reputation. BCAA is committed to helping professionals and consultants to thrive, that’s why BCAA Small Business Insurance with Professional Liability is specifically designed for BC-based businesses offering professional, creative, digital or consultative services.

Our professional liability insurance for small businesses can help cover fees associated with defense costs, judgment, settlements and fines/penalties resulting from allegations of breach of professional services, misrepresentation, wrongful business practices, misleading advice and conflict of interest.

We protect a range of BC small businesses that need insurance, including:

  • Accountants
  • Financial planners
  • Graphic designers
  • Hair salons and barbers
  • Management consultants
  • Mortgage brokers
  • Real estate agents
  • Web developers

We specialize in small business insurance and our advisors are ready to help you on your journey. Start a quote now to find the right coverage.

BCAA Small Business Insurance offers additional coverage to protect your business from:

  • Legal expenses – protects from potential lawsuits or damage to assets, including protection if staff make costly mistakes or clients break contracts that hurt your business or customers.
  • Losing customers' sensitive data – a data breach can cause loss of business, productivity and compliance penalties. Protect your business from cybercrime with data compromise coverage.
  • Losing or damaging your laptop, phone and work electronics – working remotely or in a hybrid evnironment? Get your laptop, phone and work electronics covered for damage, loss or theft while on the move.

Customize your coverage

Already covered? It’s a great time to review your current insurance policy to ensure you have the right coverage in place. BCAA Small Business Insurance offers you customized coverage with online convenience, so you can quote and buy online whenever it suits you. Our mission is to provide you with the foundation of insurance protection so your business and professional services continue to thrive.

Plus, if you have a personal BCAA Membership you’ll save up to 10%.

Barber giving a haircut

If you have any questions along the way, our BCAA Small Business Insurance advisors are ready to help online or over the phone. 

Visit to get your quote today.

The material covered in this article is provided for general informational purposes only and does not, and is not intended to, limit or extend coverage, or constitute legal or insurance advice. BCAA Small Business Insurance coverage is determined by the insurance contract.