Short Answer
There is no single revenue threshold at which every new architecture or engineering firm should buy professional liability insurance. The important point is when you begin providing professional services, because waiting until the business is generating substantial revenue can mean that you have already performed work that may later give rise to a claim.
For a new firm, the decision should take into account the type of work you are accepting, your contracts, client insurance requirements, projected revenue, claims-made coverage, and whether the policy can provide coverage for prior professional services.
The Problem With "I'll Get Insurance When I Have More Revenue"
A new practice may start gradually.
You leave a larger firm and take on a small residential project. Then another project comes along. Revenue might be $5,000, then $20,000, then $50,000.
Because the business is still small, paying for insurance can feel premature.
That exact concern comes up in a Reddit discussion about starting a small architecture firm. One architect considering moonlighting asked about liability insurance because the cost of insurance and other startup expenses could make taking only one or two projects difficult to justify. The discussion also raised whether professional liability policies can be limited to individual projects.
That's the practical issue new firms need to think through.
The timing of your first policy is not necessarily about reaching a certain amount of revenue. It's about when your professional services begin and what coverage you have for that work.
When Does the Insurance Question Start?
The insurance question generally becomes relevant when you begin providing professional services for clients, particularly when you are operating independently rather than performing the work solely as an employee of another firm.
That can happen before the business feels like a "real firm."
You may still be:
- Working from home.
- Moonlighting after your regular job.
- Taking only small projects.
- Operating as a sole proprietor.
- Generating very little revenue.
- Building a client base gradually.
The size of the business does not necessarily tell you whether a professional liability exposure exists.
If you are providing architectural or engineering services to a client, consider what would happen if an allegation concerning that work arose later.
Why Claims-Made Coverage Makes Timing Important
Professional liability insurance for architects and engineers is commonly written on a claims-made basis.
That makes the timing of the policy important because coverage can depend on when a claim is made, when the relevant professional services occurred, the policy's retroactive date, and other policy terms.
For example, suppose you complete three projects in your first year but do not purchase professional liability insurance until the following year.
You cannot simply assume that the new policy will automatically cover the earlier projects.
Whether prior work is covered depends on the policy's terms, including its retroactive date and any applicable prior-acts provisions.
What Is a Retroactive Date?
A retroactive date can determine how far back covered professional services may extend under a claims-made professional liability policy.
If a policy has a retroactive date of January 1, 2027, for example, work performed before that date may not be covered for a claim made during the policy period, subject to the actual policy language.
This is one reason waiting until after you have completed several projects can create a coverage question.
When purchasing your first policy, ask the broker:
- What is the retroactive date?
- Does the policy cover prior professional services?
- If I previously performed work without insurance, can that work be covered?
- What information does the insurer need about those earlier projects?
Do not assume that a new policy automatically picks up everything you have done before purchasing it.
What If I've Already Completed Projects?
This is where the "I'll buy insurance when I have more revenue" approach can become complicated.
If you have already provided professional services without professional liability insurance, tell your broker exactly what work you have performed.
The insurer may ask about:
- Previous projects.
- Dates of the work.
- Current and former clients.
- Known circumstances or potential claims.
- Revenue from prior services.
- The type of professional services performed.
Whether coverage for prior work is available depends on the insurer and policy terms. A broker can help determine what options are available based on the firm's actual history.
The important point is to address prior work openly rather than assume it will automatically be covered.
What About a Small Project That Requires a COI?
A common trigger for new firms is a client asking for a certificate of insurance.
You may have completed several small projects without being asked for professional liability insurance. Then a new client requires a specific limit before allowing you to start.
At that point, simply purchasing a policy may not solve every issue.
The client may require:
- A specific professional liability limit.
- Evidence of current coverage.
- A particular retroactive date.
- Coverage for the full project duration.
- Specific contractual insurance provisions.
The policy also needs to be appropriate for the services you are providing.
This is why it can be useful to discuss insurance before you have a project sitting in front of you with a short deadline.
How Much Does Revenue Matter?
Revenue still matters.
A new firm with $10,000 of projected revenue is presenting a different business profile from an established practice with $500,000 in revenue. Professional liability premiums can take projected revenue and other underwriting factors into account.
But there is no universal rule that says a firm should wait until it reaches a particular revenue level.
In the Reddit discussion, one architect described obtaining insurance quotes based on projected revenue and noted that starting with a small practice could result in a smaller premium. Another commenter was specifically concerned that the insurance cost for only one or two projects might make those projects difficult to justify economically.
Those are individual experiences rather than universal pricing rules. Actual premiums depend on the insurer, services, location, limits, deductible, claims history, and other underwriting considerations.
The practical step is to get a quote before deciding that the cost is too high.
What About Moonlighting?
Many solo practices begin as side businesses.
You may continue working for another architecture or engineering firm while accepting a few outside projects in the evenings or on weekends. The Reddit discussion reflects this path, with several architects describing moonlighting or side work as a way to build a practice gradually.
If you do this, don't automatically assume your employer's professional liability policy covers the outside work.
The outside project may be performed for a different client, through a different business arrangement, and outside the scope of your employment.
Before accepting moonlighting work, consider:
- Whether your employment agreement permits outside work.
- Who is contracting with the client.
- Which entity is providing the professional services.
- Whether your employer’s policy applies.
- Whether you need separate professional liability coverage.
- Whether the client requires specific insurance.
The insurance arrangement should match the work you are actually doing.
Example
An architect leaves a larger firm and begins taking residential projects independently.
The first project produces $5,000 in revenue. A few months later, another client hires the architect for a $15,000 project. The architect expects another $30,000 to $40,000 of work during the year.
The architect initially considers waiting until the practice reaches $100,000 in revenue before purchasing professional liability insurance. Before making that decision, the architect talks with a broker.
The broker reviews:
- The professional services being provided.
- The completed and current projects.
- Projected revenue.
- Whether any clients require insurance.
- The desired limits and deductible.
- The possibility of coverage for prior professional services.
- The retroactive date.
- The architect’s moonlighting arrangement, if applicable.
The architect can then compare the cost of coverage with the actual exposure and contractual requirements.
The takeaway: A PE who stamps drawings should understand the relationship between their professional responsibilities, the firm they work for, and the insurance policy covering the work.
Can You Buy Professional Liability Insurance for Only One Project?
This is a reasonable question for someone who has one small project and is not yet ready to operate a full-time practice.
The Reddit discussion specifically raises whether professional liability policies can be limited to a single project.
Project-specific professional liability solutions may exist in some circumstances, but availability and suitability depend on the insurer, project, services, contract, and other underwriting considerations.
It should not be assumed that a single-project policy will always be available or will satisfy a particular client's insurance requirement.
If you are considering this option, give the broker the actual project details and contract requirements rather than asking only for a generic E&O quote.
Related Questions
Do I need E&O before my architecture firm has revenue?
There is no universal revenue threshold that determines when every new firm needs professional liability insurance. If you are already providing professional services, however, it is worth discussing coverage before assuming that low revenue means insurance can wait.
The type of work, contracts, client requirements, and available coverage options all matter.
Can I buy professional liability insurance after I've already completed projects?
You may be able to purchase coverage after beginning work, but you should disclose the prior work to the broker. Whether the new policy can cover those services depends on the insurer's underwriting and the policy's terms.
Do not assume that buying a policy today automatically covers work completed in the past.
Will E&O cover work I performed before buying the policy?
It may, depending on the policy's retroactive date, prior-acts provisions, and other terms. Some policies can provide coverage for eligible prior professional services, while others may not.
Does a solo architect need professional liability insurance?
A solo architect should evaluate professional liability coverage when providing architectural services independently. Whether insurance is required by a particular client, contract, or jurisdiction is a separate question. Even when no one has asked for a certificate of insurance, professional services can still create professional liability exposure.
Can I get E&O for only one project?
Project-specific professional liability options may be available in some circumstances, but they are not universally available or appropriate. The project, services, contract, limits, insurer, and other underwriting factors matter. If you only have one project, ask a broker to evaluate the available options rather than assuming an annual policy or project-specific policy is the only solution.
Architects
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Hardcover Editorial Team
Reviewed by:
Hardcover Insurance Team
Last reviewed:
September 18, 2026
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.