Does Professional Liability Cover Breach of Contract?
Sometimes, but a contract claim is not automatically covered; many E&O policies restrict liability assumed solely by contract or breach of a guarantee.
A client can frame the same dispute as a contract breach, negligent service, or both, and the policy wording determines which allegations may be covered. The sample Hiscox E&O form excludes liability the insured assumes under contract unless it would have existed without that agreement; The Hartford says many E&O policies do not cover actions that breach a contract. Those are examples, not universal terms. Review the insuring agreement, contractual-liability and warranty exclusions, definition of damages, and any carvebacks for professional negligence. Ask the broker to compare your limitation-of-liability, indemnity, service-level, and warranty clauses with the quote. A certificate does not change the policy wording.
A contract-only promise can be treated differently from an independent duty to use professional care. Ask how defense and damages apply to each allegation in a sample customer contract.
Related Coverage
Sources
- FAQ: Professional liability insurance. Texas Department of Insurance; What’s professional liability coverage?; What types of damages…; What’s general liability insurance?; Do I need professional liability… if I have general liability…?; Is professional liability insurance required?; Can a client require…?; What’s the difference between occurrence policies and claims-made policies. Accessed 2026-09-25.
- Professional Liability – US Direct Errors and Omissions Insurance. Hiscox Inc. specimen; About this Policy / Coverage for Claims Made Against You; I.A Insuring Agreement; I.B Defense; I.C Settlement; II.A Notice of Claims; II.C Optional Extended Reporting Period; III.A, III.K, III.M, III.R, III.S Exclusions; IV.A–B Limits and Deductible; VI.O Professional Services; VI.U Wrongful Act. Accessed 2026-09-25.
- Technology Errors and Omissions Insurance. The Hartford; What Is Technology Errors and Omissions Insurance?; Coverage; Works With Contracts; Types of Companies That Need Tech E&O Insurance. Accessed 2026-09-25.
