Short answer
Often, yes. General liability covers bodily injury and property damage. It is not built for a claim that your inspection, test, or report was wrong and cost the operator money with no physical damage, and some GL policies for inspection firms carry an exclusion that removes inspection work altogether. Professional liability, also called errors and omissions (E&O), is built for those claims.
- Look for an inspection or professional services exclusion on your GL. If an inspection or professional services exclusion is attached, even a missed defect that leads to a fire or injury may fall outside the GL.
- Most professional liability policies are claims-made, and defense costs typically reduce the limit, so the retroactive date and the limit both matter.
What general liability covers and where it stops
The ISO GL form pays damages "because of 'bodily injury' or 'property damage'" caused by an occurrence. Property damage means physical injury to tangible property, including resulting loss of use, or loss of use of tangible property that is not physically injured.
An inspection company's worst claims often look different:
- An operator says your thickness readings were wrong and it replaced piping it did not need to.
- A tank or vessel you passed is later found to need repairs, and the owner wants the cost of shutdown and re-inspection.
- A report was late or incomplete and a project slipped.
Those are claims about money and reliance on your work product. They may not involve physical injury to property at all, and the GL also has an exclusion for "impaired property" and property not physically injured arising out of a defect in your work or a failure to perform a contract. That is the gap professional liability is meant to fill.
Professional services exclusions on GL
IRMI describes the professional services exclusion as "commonly endorsed onto general liability policies" to separate general liability from professional (E&O) exposures. For an inspection business, ask your agent to show you every professional services or inspection exclusion on the GL, by form number.
When an exclusion like that is on your GL, the question is no longer just about economic loss. If a vessel you inspected later fails and someone is hurt, the GL may treat the claim as arising from your inspection services and exclude it. The professional liability policy then has to answer for bodily injury and property damage from your services, not only financial loss. Ask whether yours does.
If your firm is an engineering firm, there is a second issue. The ISO definition of "insured contract" excludes indemnities under which an architect, engineer, or surveyor insured assumes liability arising from professional services, including "supervisory, inspection, architectural or engineering activities." That affects how your GL handles MSA indemnity for those services.
What professional liability covers
IRMI defines professional liability as coverage "designed to protect professionals and businesses from errors and omissions in performing their professional services," and notes that most such policies "only cover economic or financial losses suffered by third parties." Most are written on a claims-made basis, and insurer-paid defense costs reduce the available limit.
For many trades without a standard policy form, the coverage is written as miscellaneous professional liability. IRMI notes insurers "generally append manuscript coverage provisions and exclusions" to fit the profession. In other words, two E&O policies for inspection firms can read very differently.
| Claim | General liability | Professional liability |
|---|---|---|
| Your truck or tech damages a customer’s equipment on site | May respond, subject to exclusions such as care, custody, or control | Usually not |
| Financial loss from a wrong reading or late report | Usually not | Built for this |
| Injury or damage caused by a missed defect | May respond, unless an inspection or professional services exclusion applies | Check whether it covers bodily injury and property damage from your services |
Which oilfield inspection work carries this exposure
Any business that is paid to tell an operator whether something is safe or within spec has a professional exposure, because the operator relies on that answer. In oil and gas, that includes certified inspectors under the American Petroleum Institute's individual certification programs, such as API 510 (pressure vessel inspector), API 570 (piping inspector), API 653 (aboveground storage tank inspector), and API 1169 (pipeline inspector), along with ultrasonic testing examiners and other nondestructive testing work.
The more your deliverable is a judgment or a report rather than labor, the more of your risk sits outside the GL. See our oilfield inspection insurance page for the full program.
What to check in your MSA and your program
- Does the MSA list professional liability or E&O? Some MSAs list it for inspection, testing, or engineering services. Note the limit and how long coverage must be maintained after the work.
- Is there an inspection or professional services exclusion on your GL? If so, make sure the E&O covers bodily injury and property damage from your services.
- Retroactive date. On claims-made forms, work before the retro date is not covered. Do not let it move forward when you change insurers.
- Defense inside the limit. Defense costs reduce what is left to pay a claim.
- Contractual liability. Ask whether the E&O covers liability you assume under a contract, or only what you would owe without the contract. Compare that to the indemnity in your MSA, and have your attorney review the indemnity itself. See contractual liability coverage.
Bring us the documents
Send your GL endorsement schedule, any current E&O policy, and the insurance and indemnity sections of your MSAs. The exclusions on the GL and the insuring agreement on the E&O need to be read together.
Common questions
Is professional liability the same as errors and omissions?
In practice, yes. IRMI defines E&O insurance as protecting the insured against liability for committing an error or omission in performing professional duties, which is the same core idea.
If I have no professional services exclusion on my GL, do I still need E&O?
Probably. Even without an exclusion, GL is built for bodily injury and property damage. A claim for financial loss caused by a wrong reading or report generally falls outside it.
Why does the retroactive date matter so much?
On a claims-made policy, the claim has to be made during the policy period and arise from work after the retroactive date. Inspection claims can surface years after the work, so losing prior acts coverage leaves old work uninsured.
Do NDT technicians need the same coverage as API inspectors?
The exposure is similar whenever a customer relies on your results. The right limit and form depend on the work, the customers, and what the MSA requires.
Sources
- ISO CG 00 01 04 13, Commercial General Liability Coverage Form (copy published by Cooper and Scully). Coverage A insuring agreement, property damage definition, impaired property exclusion m, and insured contract paragraph f.(3).
- IRMI glossary: professional liability (PL). Economic or financial loss focus, claims-made basis, defense costs reduce limits.
- IRMI glossary: errors and omissions insurance (E&O). Liability for errors or omissions in performing professional duties.
- IRMI glossary: professional services exclusion. Commonly endorsed onto GL policies to separate GL and E&O exposures.
- IRMI glossary: miscellaneous professional liability coverage. E&O for professions without a standard form; manuscript provisions and exclusions.
- American Petroleum Institute: Individual Certification Programs. API 510, 570, 653, 1169, and ultrasonic testing examiner certifications.
This page explains insurance, not law. Have your attorney review indemnity and contract language; our job is making the insurance match it.
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