$2M Professional Liability (E&O) Insurance for PR Firms

For PR firms with a client contract that asks for $2M: the clause usually means $2M for each claim, and a $1M/$2M policy may not meet it.

What does a $2M requirement mean for PR firms?

Professional Liability (E&O, short for Errors and Omissions) covers claims that your services caused a client a financial loss. A typical clause looks like this:

• Per claim: the most the policy pays for any one claim. Here, $2M.
• Aggregate: the most it pays for all claims made during one policy period. Here, $2M too.
• Check the pair: $2M/$2M and $1M/$2M are easy to mix up. See limits explained.
• Claims-made: the policy covers claims made and reported while it is active, for work on or after the retroactive date (the earliest date of work the policy covers). A claim made after you cancel is generally not covered.

Defense costs (legal fees to fight a claim) often sit inside the limit. At $1M, a long defense can use up much of it before any settlement. $2M leaves more room.

Who asks PR firms for $2M?

Clients with more at stake ask PR firms for $2M. Many PR contracts ask for $1M instead (see $1M for PR firms). Typical $2M requests come from:

• Large consumer brands with standard vendor terms.
• Public companies, where a wrong press release statement could reach investors.
• Healthcare, pharmaceutical, financial and other regulated clients.
• Larger agencies that hire you as a subcontractor.
• Universities and government offices that set limits in a request for proposal (RFP).

If a client asks for more, see $3M for PR firms. Limits of $3M and above are rarely found online and usually need a broker. Morrow can help you find them.

How is $2M built?

At $2M, the limit is often one primary policy (the policy that pays first). Some firms reach $2M with a $1M primary plus a $1M excess layer (an extra policy that pays after the primary is used up). The excess should follow form, meaning it uses the primary's terms. A commercial umbrella almost never covers Professional Liability, so it is not a way to reach $2M.

Many PR firms buy media liability inside Professional Liability or as a separate policy. Media liability generally covers copyright infringement (using protected work without permission), defamation (a false statement that harms someone's reputation) and invasion of privacy in your content. Trademark and advertising coverage varies by form.

Adding a client as an additional insured (a party that gets coverage under your policy) is not automatic on Professional Liability. Some carriers allow it in limited form, usually only for liability that arises from your work, and availability varies by carrier and form. Many clients accept a certificate of insurance, a summary of your coverage that does not change the policy.

What will underwriters ask for?

An underwriter is the person at the insurer who decides whether to offer coverage and on what terms. For a PR firm, they usually ask for:

• Your services and the revenue share of each: media relations, crisis, social media, influencer work, events.
• Whether you write investor communications or work for healthcare or regulated clients.
• How content is reviewed before release, including fact checks and legal review.
• How you clear images, music and quotes, and how sponsored posts are labeled.
• Whether you use freelancers, and whether projects have signed contracts that do not promise press results.
• Prior claims, known incidents, and your current policy and retroactive date.

What affects the cost?

• Mix of services. Crisis, investor and regulated-industry work may cost more than routine media relations.
• Revenue and client size. Larger accounts mean larger losses.
• Content review. Clear fact-checking steps may help.
• Limit structure. A higher per claim limit usually costs more. A higher retention (what you pay on each claim first) usually lowers the premium.
• Claims history and terms. Prior claims and coverage for older work can raise the price.

Frequently asked questions

Do I need $2M Professional Liability as a PR firm?

Only if a client contract or RFP asks for it. Many small PR firms carry $1M. Check when proof of coverage is due, so the policy is in place when work starts.

Is $1M/$2M enough if my PR contract says $2M?

Usually not. A $1M/$2M policy pays $1M for any one claim, so a clause for $2M each claim is not met. Confirm with the client that primary plus follow-form excess meets the clause.

I carry $1M Professional Liability and a client wants $2M. How do I get it?

Request new quotes for a $2M policy through Morrow. Morrow can ask for quotes that keep your retroactive date, so work you did before the new policy starts stays covered, where the market allows. Keep your current policy until the new one starts. Report anything that could become a claim to your current carrier before that policy ends. See retroactive dates.

What if my PR contract makes me indemnify the client?

It can change what is covered. An indemnity clause means you agree to cover the client's losses, and some policies limit coverage for liability you take on by contract.

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.