Professional liability insurance
Policy covering a professional's liability for damage caused to third parties in the course of their activity, in the event of error, omission or negligence.
Professional liability insurance (RC Pro in France), known in US and UK terminology as Errors and Omissions (E&O), covers the financial consequences of the civil liability a professional may incur toward clients or third parties in the course of their practice. It responds to faults, errors, inaccuracies, omissions, negligence or breaches committed while delivering professional services that cause the third party financial or non-pecuniary loss. Intentional acts, fraud and criminal liability are generally excluded. Regulated professions (lawyers, doctors, accountants, architects) are required by law to carry it. With agentic AI and the Zero-Employee Firm, it is the first policy the director-architect reaches for to cover the risk of decisions made by algorithmic agents. That runs into a structural mismatch. A standard professional liability form was written for human error in a defined professional activity. It was not written for autonomous decisions by opaque algorithms, where no one can show that the fault came from a professional breach by the insured. Exclusions for digital tools supplied by third parties muddy the liability chain further when an LLM has produced a damaging decision.
Textbook case: a strategy consultant uses an LLM agent to draft an acquisition recommendation, and the recommendation turns out to be wrong. Professional liability covers the analytical error, since the consultant's professional liability is engaged. But if the model produced a factually false statement (a hallucination) that nobody checked, the insurer may invoke the exclusion for use of uncontrolled tools or for failure to verify information provided to a third party.
professional indemnity, PI, E&O, errors and omissions
Follow the research
One letter a week. First, the week's underwriting note, when one is published: a dated, argued decision, signed by Paul Bernardski. Then what the observatory published on cyber risk, political risk and insurance. No account, no tracking.
No spam, one-click unsubscribe, no data ever sold.