$1M Professional Liability (E&O) Insurance for Relocation Companies

If your client contract asks your relocation company for $1M in Professional Liability (E&O), you need a policy that pays up to $1M per claim for financial losses from your services.

What does a $1M requirement mean for relocation companies?

Professional Liability (E&O, short for Errors and Omissions) covers claims that a mistake in 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, $1M.
• Aggregate: the most the policy pays for all claims in a policy year. Here, $2M. A $1M/$1M policy does not meet it.
• Claims-made: the policy covers claims made and reported while it is active, for work done on or after the retroactive date (the earliest work date covered). See claims-made vs occurrence.
• Covered services: the policy should describe what you actually do. If it lists only "move coordination" but you also run home sale programs, a claim from that work could be disputed.

Hypothetical examples, not real events. A firm misreads a lease deadline, and the transferee (the employee being relocated) pays rent on two homes. A tax gross-up (extra pay to cover taxes on relocation benefits) is calculated wrong. A home sale program uses a wrong valuation. Some policies limit or exclude losses tied to home sale programs, guarantees or tax advice, so do not assume they are covered.

Who asks relocation companies for $1M?

These groups most often write the clause into a contract:

• Employers and their HR teams.
• Relocation management companies (RMCs) that hire smaller firms for destination services.
• Government and public-sector clients, which may put the insurance clause in a master services agreement (MSA).
• Real estate brokerages or referral partners, whose agreements occasionally include an insurance clause.
• Large corporate programs with home sale or buyout services. These may ask for more (see $3M for relocation companies).

How is $1M built?

At $1M, the limit is usually one primary policy (the policy that pays first). No excess layers (extra policies stacked above it) are needed. Relocation companies are often placed on a general Professional Liability (E&O) form for service firms, sometimes called Miscellaneous Professional Liability. If your staff are licensed agents, you may also need real estate E&O. A $2M requirement may come up when a program includes home sale or buyout services (see $2M for relocation companies).

A commercial umbrella almost never covers Professional Liability. Clients usually cannot be added as additional insured (given rights under your policy) on it either. If your contract asks for that, send us the wording so Morrow can review it. A certificate of insurance (a one-page summary of your coverage) shows that a policy exists, but it does not change the policy. Ask the client what it will accept. See additional insured on Professional Liability.

Guaranteed buyouts and taking title are commonly excluded. Goods you move or store usually need separate coverage, such as cargo (coverage for goods in transit).

What will underwriters ask for?

An underwriter is the person at the insurer who decides whether to offer coverage. Expect questions like these:

• Your services, with a rough share of revenue from each, such as move management, destination services, home sale programs and tax gross-up.
• Whether you take title to a transferee's home or advance equity.
• Whether you hold or pay out client or transferee funds. Mishandling or theft of funds is usually excluded from Professional Liability and is addressed by crime or fidelity coverage (coverage for stolen money).
• Prior claims, anything that could become a claim, and your current retroactive date.

What affects the cost?

• Service mix. Services with larger dollar exposure, such as home sale programs and tax work, may cost more than lower-exposure services like destination services.
• Revenue and volume. More moves mean more chances for a claim.
• Claims history. Prior claims can raise the price or narrow options.
• Aggregate and retention. A higher aggregate may raise the premium (the price of the policy). A higher retention (the amount you pay on each claim, like a deductible) may lower it.
• Contracts and controls. Written contracts and tax checks may help an underwriter view your risk more favorably.

Frequently asked questions

Do I need $1M Professional Liability as a relocation company?

Often yes, if a client contract or master services agreement requires it. Read the insurance section for the per claim and aggregate amounts, then send it to Morrow to review.

Does Professional Liability cover damage to a transferee's belongings?

Usually not. Damage to goods is a physical loss, often handled by the mover's or cargo coverage. Professional Liability is for financial loss from your services.

Does Professional Liability cover a data breach of transferee personal data?

Usually not. A data breach is typically a Cyber Liability claim (coverage for stolen or exposed data). Send us your current policies and Morrow can review how they fit together.

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

No, a $1M/$1M policy does not meet a $1M/$2M clause. Morrow can request quotes for a $1M/$2M policy and ask insurers to keep your retroactive date and prior acts coverage (coverage for work you did before the new policy starts) where the market allows. Keep your current policy in place until a new one starts, and consider reporting known incidents to your current insurer before you switch. Your policy terms control reporting deadlines.

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.