If a client requires $3M of Professional Liability (E&O) from a 3PL or logistics consultant, one $3M primary policy, or a smaller primary plus follow-form excess, usually meets it.
The short answer
- $3M of Professional Liability (E&O) is a high limit for 3PL and logistics consultants, usually asked for by large shippers, software rollouts or deal work, and met with one policy or stacked layers.
- It is often built as one $3M primary policy, or a $1M or $2M primary plus a follow-form excess layer. Confirm with the client that this meets the clause.
- $3M is rarely available online and is usually placed by a broker. Morrow can help you find it.
What does a $3M requirement mean for 3PL and logistics consultants?
Professional Liability (E&O, short for Errors and Omissions) covers claims that your advice or services cost a client money, such as a network study that went wrong. A $3M clause may read like this:
Illustrative contract wording
Consultant shall maintain Professional Liability (Errors and Omissions) insurance covering all consulting services under this Agreement, with limits of not less than $3,000,000 per claim and $3,000,000 in the annual aggregate. Limits may be met through any combination of primary and excess policies. If written on a claims-made basis, coverage shall be maintained for three (3) years after the services end.
Illustrative example only. Your contract's wording controls.
- Per claim and aggregate: the most paid for one claim, and for all claims made during the policy period.
- Claims-made: Professional Liability almost always covers claims made and reported while the policy is active, for work done on or after the retroactive date (the earliest date of work the policy covers).
Who asks 3PL and logistics consultants for $3M?
Many logistics consulting contracts ask for $1M or $2M. A $2M clause is usually met by one primary policy. At $3M the limit is often stacked, and a few very large shippers step up to $5M. $3M tends to come from:
- Large shippers and manufacturers whose vendor MSA (master service agreement) sets one limit for all consultants.
- National retailers and ecommerce brands hiring you to pick a 3PL or open a fulfillment site.
- Carriers and large 3PLs hiring you for multi-site WMS (warehouse management system) or TMS (transportation management system) rollouts.
- Private equity firms and lenders relying on your deal review.
How is $3M built?
A primary policy pays first. An excess policy pays only after the primary limit is used up. "$2M xs $1M" means a $2M layer that sits above the first $1M.
Example A: single policy
Example B: two layers
Example C: two layers
The excess should follow form, meaning it adopts the primary policy's terms. Every layer should share the same retroactive date, policy period and named insured (the business covered). A commercial umbrella almost never covers Professional Liability (see does an umbrella cover Professional Liability). Clients usually cannot be added as additional insureds (extra covered parties) on Professional Liability. Some carriers allow it for a client named in a written contract, limited to liability from your services.
Logistics consultants often buy a general consulting form (sometimes called Miscellaneous Professional Liability). If you configure WMS or TMS software, Technology E&O may fit better. If you also arrange freight as a broker, contracts often add contingent cargo (cover for goods another carrier moves) and contingent auto liability (cover for a hired carrier's truck accident). Both are separate coverages that pay only if the carrier's own insurance does not.
If you carry $1M or $2M today, request new quotes through Morrow for a $3M primary or excess layer. Morrow can ask carriers to keep your retroactive date and prior acts coverage (cover for work you did before the new policy starts) where the market allows.
Good to know
Defense costs can use up the limit. Many Professional Liability policies pay defense costs inside the limit, so legal bills reduce what is left (see defense costs inside or outside limits).
What will underwriters ask for?
Underwriters decide whether to offer coverage and on what terms. At $3M, they may review:
- Your services, such as network design, carrier bids or WMS projects, and revenue from each.
- Whether you arrange freight, hold goods, run a warehouse or handle client freight payments.
- Your largest projects, including freight spend and number of sites.
- Whether you promise savings or approve software go-live.
- The contract asking for $3M, including any indemnity clause (a promise to cover the client's losses) and any limitation of liability clause (a cap on what you owe a client).
- Loss runs (a report of past claims) and your current policy with its retroactive date.
What affects the cost?
- Type of work. Software rollouts and savings-based fees often cost more.
- Revenue and project size. Bigger freight budgets often mean bigger losses.
- How the $3M is built. Pricing for the primary and excess layers can differ, and it varies by market.
- Claims history. Past claims can raise the price.
- Retention and defense terms. Retention works like a deductible, and a higher one usually lowers premium.
Frequently asked questions
What could a $3M claim against a logistics consultant look like?
These two examples are hypothetical. A network study misjudges demand, and a retailer leases a distribution center it does not need. A WMS you set up fails in peak season, and the shipper says it lost orders.
Can a small logistics consulting firm get $3M in Professional Liability?
Sometimes, but it is not guaranteed. Carriers usually tie the limit to your revenue and project size, and many small firms are offered $1M or $2M. A $1M or $2M primary plus follow-form excess can reach $3M where an excess carrier will quote it.
What if the next contract asks for $5M?
Some very large shippers step up to $5M. That limit is very rare online and almost always needs a broker. Morrow can help you find it. See $5M Professional Liability for 3PL and logistics consultants.
Looking for $3M in Professional Liability? Morrow can help.
Send us the insurance requirement from your contract and your current policy. Morrow can review both and request quotes for a $3M primary or a primary plus excess, keeping your retroactive date where the market allows.
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This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.