Does my Ontario business need professional liability or errors and omissions insurance?

Professional liability insurance, often called errors and omissions (E&O) insurance, covers claims that your business's advice, services, or professional work caused a client financial loss, as opposed to commercial general liability, which covers bodily injury or physical property damage. If your business provides advice or a professional service a client relies on — consulting, accounting, IT services, design, or many regulated professions — an unhappy client alleging your work was negligent or caused a financial loss is a realistic risk that CGL insurance typically will not cover at all.

Some regulated professions in Ontario are required by their governing body to carry a minimum level of professional liability coverage as a condition of licensing, so for those businesses it is not optional. For businesses outside a regulated profession, whether to carry E&O coverage is a business decision based on the nature of your services, the financial stakes for clients if something goes wrong, and whether client contracts require proof of coverage, which many larger clients now do before they will engage you. Reviewing what your specific service actually exposes you to, rather than assuming general liability insurance already covers professional mistakes, is the key first step.