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Professional liability insurance in Oregon
Professional liability insurance coverage, also called errors and omissions insurance (E&O), protects small business owners against the cost of client lawsuits over unsatisfactory work. Although not required by state law, it's strongly recommended for professional service providers in Oregon.
What is covered under professional liability insurance in Oregon?
Professional liability insurance covers the cost of lawsuits related to the quality of your work, including legal fees and settlements.
It covers the following types of customer claims for many Oregon businesses:
- Accusations of negligence, such as an architect who creates an unsafe building design.
- Medical malpractice, such as when a doctor misinterprets test results, causing more medical bills.
- Work mistakes and oversights, such as an accountant who makes a mathematical error or fails to include the right data in their work resulting in a financial loss to the client.
- Missed deadlines and undelivered services, such as a web designer who fails to build a website before a client’s busy season.
- Inaccurate advice, such as an attorney who misinterprets a legal statute that results in a costly mistake.
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Who should carry professional liability insurance in Oregon?
From Portland and Salem to Eugene and Bend, any business that provides a professional service or expert advice should carry professional liability coverage, as a client could sue if your service or advice causes accidental harm. Even a frivolous lawsuit can be expensive between accounting for attorney’s fees, court costs, or a settlement.
Industries often at risk for professional liability claims include:
Technology professionals
IT consultants and other tech professionals are susceptible to lawsuits related to system downtime, data breaches, missed deadlines, and errors. They can bundle E&O insurance and cyber insurance into one policy—technology professional liability insurance, most often referred to as tech E&O.
Building design professionals
Those who work in building design, such as architects and engineers, are at risk of a lawsuit if a client accuses them of making a costly mistake. For example, a bridge could develop cracks over time, or a project could be delayed for months due to unforeseen circumstances.
Insurance professionals
In Oregon, insurance consultants and managing general agents must maintain an errors and omissions (E&O) policy with a minimum amount of $500,000 per occurrence.
Insurance professionals, including agents and insurance brokers, deal with large amounts of financial data and have to use their best judgment in advising their clients. If a client doesn’t have enough coverage, or the right type of coverage, they might blame their agent or the insurance agency for failing to make sure they were protected.
Even if you’ve done nothing wrong, a disgruntled customer might file a lawsuit if your advice leads to a financial loss.
Finance and notary professionals
Notary E&O insurance, also called professional liability insurance, can cover court costs and other legal expenses if a notary public is sued for an unintentional error or oversight.
Some lawsuit examples include unintentionally violating the law while notarizing, being named in a lawsuit even if you did nothing wrong, or an imposter forging your signature on a document without your knowledge.
Additionally, professional liability insurance can help accountants and other finance professionals recover quickly from lawsuits and other unexpected costs from mistakes and oversights, like an accounting error.
Is professional liability insurance required in Oregon?
Oregon law doesn't require small business owners to have a professional liability insurance policy. However, you might need this coverage to sign a contract, get a license in your field, or hold a position.
Healthcare professionals
Professional liability is referred to as medical malpractice insurance when it applies to doctors and other healthcare professionals, such as therapists.
Oregon doesn't have a legal mandate requiring practicing physicians to carry medical malpractice insurance. However, most hospitals, outpatient surgery facilities, and physician’s offices in Oregon have malpractice insurance requirements for doctors with admitting privileges.
Typically, Oregon physicians carry limits of $1 million per occurrence and $3 million annual aggregate. Higher-risk specialties like surgeons and OB/GYNs will likely need higher limits. This coverage is essential in a setting where a mistake could cause a bodily injury or worsen a medical condition.
Additionally, qualifying healthcare practitioners in rural Oregon can be awarded a subsidy for the cost of their medical malpractice insurance premium.
Real estate professionals
Oregon doesn't require real estate agents to have E&O insurance. But your real estate franchise, bank partners, or even clients may ask you to have this coverage and show proof of insurance in business contracts.
In this type of profession, E&O covers situations such as not disclosing a problem with a property, listing incorrect information in an MLS sheet, and bodily injuries or property damage that happen during a showing.
Attorneys
For lawyers, professional liability is also known as legal malpractice insurance.
In Oregon, any lawyer whose principal office is in Oregon is required to maintain malpractice coverage with the Professional Liability Fund (PLF). The PLF provides coverage of $300,000 aggregate plus an additional $50,000 claims expense allowance.
Qualifying healthcare practitioners in rural Oregon can be awarded a subsidy for the cost of their medical malpractice insurance premium.
Top professions that need professional liability insurance
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How much does professional liability insurance cost in Oregon?
View video transcript.
Get professional liability insurance to protect yourself from claims that you didn't deliver on a deadline, or made a costly mistake.
Some clients require you to have this policy. It can protect you from expensive lawsuits for only about 60 dollars per month.
Don't put your business at risk. Apply for your policy today!
Alert. Alert.
The average cost of professional liability insurance nationwide is $61 per month. In Oregon, the average cost is $58 per month.
The cost of professional liability coverage depends on several factors, such as:
- Your type of business, industry, and similar risk factors
- Coverage limits and deductible
- Your business size and location
- Day-to-day operations
- Your claims history
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How does professional liability insurance work in Oregon?
Professional liability insurance covers your legal defense costs if you’re sued over a mistake in your professional work.
Even if you’ve done nothing wrong, a legal battle can be expensive. In addition to your attorney’s hourly rate, you’ll likely be charged for administrative costs such as copying, filing, and travel expenses. You may also have to pay for expert witnesses to testify on your behalf, a court-ordered legal judgment, or a settlement to avoid trial.
Professional liability insurance covers all of the above, up to the coverage limits of your policy. The policy limits you choose should take into account how expensive it can be to fight a professional liability lawsuit. You also need to determine the amount of coverage required to obtain a contract or work in a certain field.
This policy can be very affordable for small, low-risk businesses. Contact an insurance agent if you need help choosing the right coverage limits or other options.
Are there any exclusions in professional liability insurance?
A professional liability policy covers a wide range of lawsuits, but it will not cover intentional harm you cause to others. Most insurance companies exclude:
- The illegal violation of any law, regulation, or statute
- Any services you provide under the name of another entity, such as a subsidiary business or organization not listed on your policy
- Defamation, such as libel and slander
- Discrimination
Does general liability insurance include professional liability coverage?
General liability insurance doesn't include professional liability coverage. Commercial general liability covers common business risks and liability claims such as customer injuries, customer property damage, and advertising injuries.
If a customer falls and suffers a personal injury at your workplace, it would be covered by your general liability policy, which would include your legal defense costs. If someone sues you over unsatisfactory work, it would be covered by your professional liability coverage.
Read more about general liability vs. professional liability insurance.
What other types of business insurance do OR companies need?
General liability and professional liability are often the first two policies purchased by small business owners. However, businesses in Oregon may also need the following coverage options:
Workers’ compensation insurance is required for all employers in Oregon, even if the company only has one employee, including part-time workers. It covers medical expenses and lost wages for Oregon workers who suffer a work-related injury.
Commercial property insurance covers your physical business property and equipment. It’s often required to sign leases.
A business owner’s policy (BOP) combines general liability coverage and commercial property insurance. It's usually less expensive than buying each policy separately.
Commercial auto insurance is required in Oregon for any and all vehicles. This includes personal and business use.
Cyber insurance covers the cost of dealing with a data breach or malicious software attack.
Employment practices liability insurance (EPLI), a type of management liability insurance, protects against lawsuit expenses related to claims of harassment, discrimination, and wrongful termination that professional liability typically won’t cover.
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Professional liability vs. malpractice insurance
Professional liability and malpractice insurance both protect against professional liabilities a business might face. However, they cover two separate types of claims, and you may need to purchase one or both policies depending on your risks.
How do I get professional liability insurance for my Oregon small business?
Complete Insureon’s easy online application today to compare business insurance quotes from top-rated U.S. insurance carriers. Our Oregon licensed insurance agents can help answer any questions and provide advice on the right business insurance coverage for your business.
Once you find the right small business insurance, you can begin coverage and receive your certificate of insurance in less than 24 hours.
Updated: December 19, 2024
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