$3M Professional Liability (E&O) Insurance for PR Firms

For PR firms whose client contract asks for $3M, Professional Liability (E&O) can come as one $3M primary policy, or a smaller primary policy plus an excess layer.

What does a $3M requirement mean for PR firms?

A $3M requirement means a client wants your Professional Liability (E&O, short for Errors and Omissions) policy to pay up to $3M if they say your advice or work cost them money. PR firms often want it to include media liability, which covers claims over copyright, trademark, defamation or privacy in content you create. A $3M clause often reads like this:

• Per claim and aggregate: the most paid for one claim, and for all claims in one policy year.
• Claims-made: the policy covers claims made while it is active. The retroactive date is the earliest work it covers. See claims-made vs occurrence.
• Media liability: if the clause names it, check that it is included at the full limit, not a smaller cap (a sub-limit).
• Primary plus excess: the last sentence lets you stack policies. Not every clause does.

Who asks PR firms for $3M?

Large brands, regulated companies, holding-company agencies and government buyers often ask PR firms for $3M. Most of them have a lot at stake:

• Large consumer and tech brands with standard agency contracts
• Financial, healthcare and other regulated companies, especially for investor relations or crisis work
• Holding-company agencies that hire you as a subcontractor and pass their requirement down
• Government clients, where it may be written into a request for proposal (RFP)

How is $3M built?

You can build $3M as one primary policy or as a smaller primary plus an excess layer. A primary policy pays first. An excess policy pays only after the primary limit is used up.

Every layer should share the same retroactive date, policy period and named insured (the business the policy covers). Each excess layer should follow form, so it uses the primary's terms, including media liability.

Many policies pay defense costs (legal fees) inside the limit, so legal fees use up the limit (see defense costs inside vs outside limits). A commercial umbrella almost never covers Professional Liability.

At $2M, one primary policy is often enough (see $2M for PR firms). At $5M, a primary plus excess setup is more likely (see $5M for PR firms).

What will underwriters ask PR firms for?

Underwriters (the people at the insurer who decide whether to offer coverage and on what terms) usually ask about your services, clients and how you clear content.

• Your services, such as crisis, investor relations or influencer work
• Your largest clients, including regulated work
• How you clear content: licenses, fact checks and approvals
• Your standard client agreement and any limitation of liability clause (a cap on what you owe a client)
• Loss runs (a report of past claims), your retroactive date, and any incident that could become a claim

What affects the cost?

• Services and clients. Crisis, investor relations and regulated-industry work may cost more to insure than routine media relations.
• How the $3M is built. A primary layer often costs more per $1M of limit than excess does.
• Claims history. Past claims can raise the price or narrow the options.
• Retention and defense costs. Retention (the amount you pay on each claim before the policy pays) works like a deductible, and a higher one often lowers the premium.

Frequently asked questions

Do I need $3M Professional Liability (E&O) as a small PR firm?

Only if your contract requires it. If it does, a smaller firm may be able to get a single $3M primary policy, or a lower primary plus an excess layer, depending on underwriting.

Can a client be added as an additional insured on my PR firm's $3M Professional Liability?

Usually not. Professional Liability covers your own liability for your work, so an additional insured (a party also protected by your policy) does not usually fit. Tell Morrow if your contract asks. Clients often accept a certificate of insurance (a one-page summary proving your coverage) that lists each layer.

My PR firm has a $1M policy and the contract asks for $3M. What now?

Request new quotes through Morrow, either a new $3M primary or an excess layer above a primary. Ask for terms that keep your retroactive date, so work you did before the new policy starts may stay covered (this is called prior acts coverage), where the market allows. Keep your current policy in force until the new one starts, and report any known incident to your current insurer before you switch.

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.