If you sell a professional service, add this risk to your list. Some of the professionals who should be concerned are insurance agents, accountants, lawyers, virtually every kind of consultant, architects, engineers, beauty consultants, doctors, dentists, veterinarians, real estate agents, real estate appraisers, and 
morticians.

A professional liability policy covers you if a mistake you make on the job hurts your client. Here are some examples:

• A surgeon who leaves the scalpel in her patient
• An insurance agent who forgets to add a client’s car to an auto policy prior to an accident
• A lawyer who loses a client’s case because he forgot to file the suit on time

Buying a separate professional liability policy (also known as errors and omissions insurance) is important because, without it, you have no coverage elsewhere. Business liability policies almost always exclude coverage for professional errors. And homeowner’s policies exclude liability coverage for anything business related.

When you buy professional liability coverage, be sure that:

• It covers what you do. I recently had a very successful business client, who did management consulting, buy a less expensive errors and omissions policy from another agent. When I reviewed the new policy, it covered computer consulting but specifically did not cover – you guessed it – management consulting!
• It covers your defense costs and any legal judgment stemming from your responsibility for the errors of independent contractors who do work for you. Be careful: Many policies do not cover defense costs or
• your liability for errors involving your independent contractors. You want a policy that does.