Short answer
When a client requires a higher professional liability limit than your firm carries, you have several options. Increasing your existing practice policy is one path. You can also explore excess professional liability, project-specific coverage, and negotiating the requirement itself.
The right approach depends on the contract language, how long you must maintain the higher limit, and what your current insurer and other markets can offer. Doubling your entire practice policy isn’t automatically the only solution.
What does the contract require for a higher professional liability limit?
Start with the insurance provision itself. The details shape what you actually need to arrange. Ask yourself:
- Does the higher limit apply to the whole practice or just this project?
- Does the contract list per-claim and aggregate limits separately?
- Does it permit excess or umbrella coverage?
- Does it name a specific insurer or policy form?
These answers change which options are available.
How long must you maintain the higher limit?
Duration matters, particularly for professional liability. Some contracts require the higher limit only during the project. Others require it for a period after completion or reference maintaining coverage for the services performed during the engagement. These are different requirements, so review the policy and contract language together. If the provision is unclear, ask the client to clarify before you respond.
Can you negotiate the requirement?
Not every insurance provision is fixed. Whether a client will modify it depends on the client, the contract, and the project. Consider raising these questions:
- Does the higher limit need to apply to every project you do for this client, or just this one?
- Would your existing policy plus an excess layer work?
- Is the requirement proportional to the scope and fee of the engagement?
A client isn’t obligated to agree to changes. The goal is to clarify the requirement and identify acceptable options before you commit to additional cost.
Can you increase your existing practice policy?
Yes, and this is often the first step. Ask your current carrier or broker whether the policy can go from $1 million to $2 million, and what that would cost. Your broker will likely need information about your operations, the specific project, the required limit, the duration, and your claims history. The insurer determines what is available and on what terms.
Don’t assume the premium will double along with the limit. Pricing for additional limits depends on the insurer, policy structure, and underwriting, and it doesn’t necessarily scale proportionally.
Is excess professional liability available for a higher limit?
An excess policy sits above your existing professional liability coverage, subject to its own terms and conditions. Whether it can satisfy a client’s requirement depends on the contract language and how the coverage is structured.
For example, $1 million underlying plus $1 million excess could potentially provide $2 million combined. That is an illustration, not a guarantee that a specific contract requirement is met. Before you assume this works, confirm the following:
- Does the excess policy sit over the relevant professional liability coverage?
- Does the contract permit excess limits to satisfy the requirement?
- Does the excess policy carry exclusions that could affect the project?
Is project-specific professional liability an option?
Depending on the market, a project-specific or project excess structure may provide additional coverage tied to a defined project and period. It can do this without permanently raising your regular practice limits.
This option tends to be worth exploring when one client’s requirement sits well above what your firm typically carries and ties to a single engagement. Don’t assume a project-specific policy covers every activity of your broader practice. Evaluate it against the actual contract.
Who pays for the additional insurance?
If a client requires substantially higher limits, factor the added cost into how you price the engagement. Consider discussing these points with the client:
- Is the cost a one-time project expense or an ongoing one?
- Will the client contribute toward it?
- Would the client consider modifying the limit or duration instead?
No universal rule requires the client to cover the additional premium. It is a commercial negotiation, not a default expectation.
Example
An architecture firm has carried $1 million in professional liability for several years. A new commercial client’s contract requires $2 million.
The firm’s first instinct is to replace its policy with a permanently higher limit. Before doing that, the firm and its broker review the contract wording and ask several questions:
- Does the requirement apply to the whole practice or just this project?
- How long must the higher limit stay in place?
- Can the current carrier increase the practice policy, and at what cost?
- Could an excess layer satisfy the requirement instead?
- Would the client accept an alternative structure?
Working through these questions first gives the firm a clearer picture of what needs to change and what it will cost. Jumping straight to a bigger policy would have skipped that step.
What to check
Before you agree to a higher limit, review the following:
- The exact professional liability limits the contract requires
- Whether the requirement applies to this project or the entire practice
- How long you must maintain the higher limit
- What your current carrier would charge to increase the practice policy
- Whether excess professional liability could satisfy the requirement
- Whether project-specific or project excess coverage is available
- Whether the client would accept an alternative coverage structure
- How the additional cost compares to the project fee
Also review the insurance requirement alongside the rest of the contract. Indemnity language, limitation of liability, and post-completion coverage requirements all matter, since the limit is only one part of what you’re agreeing to.
Related questions
Can I buy an extra $1 million of E&O for one project?
Possibly. Depending on the insurer and project, excess or project-specific coverage may be available. Review the contract to confirm the proposed structure satisfies the requirement.
What is excess professional liability insurance?
It provides additional limits above an underlying professional liability policy, subject to the excess policy’s own terms and conditions. Whether the combined structure meets a client’s requirement depends on the contract and policy language.
Can my client require me to maintain E&O after the project ends?
A contract can include this kind of requirement. Whether it is enforceable or reasonable depends on the contract, applicable law, and the circumstances. Review it with both your broker and legal counsel.
Should my client pay for the additional insurance?
No universal rule requires it. Factor the added cost into the project fee and commercial negotiation instead of assuming the client will cover it.
Client asking for higher limits?
Send us the contract’s insurance requirements and we’ll help you compare options for meeting the required limit.
This article is educational and does not provide legal advice or determine whether a specific claim is covered. Policy terms, exclusions, underwriting requirements, and applicable law vary. Consult your insurance professional and qualified legal counsel regarding your circumstances.