The cost of professional liability insurance can vary wildly depending on many factors such as type of business and services being provided, annual revenues, and even sometimes annual payroll. The main rating factors for professional liability insurance are in most cases:
- Type of Business/Profession: For example, management consultants are considered a lower risk than structural engineers and therefore will pay a lower rate.
- Types of Services Being Provided and/or Types of Projects Being Worked On: For example, if a structural engineer works on projects related to condominiums (especially new construction), they will most likely pay a higher rate than a structural engineer that does not perform any work related to condos as they are considered a high risk by most insurance carriers in most states.
- Annual Revenues: Gross annual revenues are an important rating factor for most professional liability policies around the world, as they provide underwriters with a way to gauge the potential risk associated with a specific business/professional. A business that brings in $10K over the course of year typically does less work than a similar business that brings in $500K per year, and therefore is viewed as having a lower risk of incurring a loss/claim against them.
- Number of Employees and/or Annual Payroll: There are some professional liability programs out there that use a flat per employee rate or annual payroll as a rating factor for certain types of businesses, however this is more common with general liability rating that with professional liability.
There are many other factors that can affect the cost of professional liability insurance such as the state that a business is located in, if the business has had prior coverage or not, the requested liability limits, and requested deductible or retention amount.
As an independent agency, we provide professional liability insurance to many different types of businesses and professionals in multiple states. While rates can vary widely as we’ve already described, the average professional liability pricing for most businesses and professionals tends to range from $1,000 – $3,000 per year. Here is a breakdown of the average annual pricing that we see for some of the more common business types that we work with:
- Management Consultants: $400 – $2,000
- IT Consultants: $400 – $2,000
- Civil Engineers: $800 – $2,000
- Structural Engineers: $4,000 – $10,000
- Mechanical Engineers: $1500 – $5,000
- Safety Consultants: $2,000 – $5,000
- Security Consultants: $2,000 – $5,000
- Construction Project Managers: $800 – $5,000
*Pricing varies on a case to case basis. Coverage and pricing subject to eligibility.
Contact us today to find out more about how we can help you in obtaining great coverage at a great price, or visit our Business Insurance Quote page to request a no obligation quote!
