Professional civil liability insurance

This insurance covers financial losses incurred by a client or a third party due to your professional error, carelessness, or negligence. For some professions in Lithuania, it is mandatory by law, while for others, it is increasingly required by clients themselves.

Who is this insurance relevant for?

This insurance is relevant for anyone providing services based on their professional qualifications, where an error could result in financial loss for the client. For certain professions, the state has mandated insurance and set minimum coverage limits to ensure that client losses are compensated.

Mandatory by law

Advocates and professional partnerships of advocates
Notaries and bailiffs
Auditors and audit firms
Individuals and companies providing accounting services
Customs brokers
Structure designers and contractors
Insurance brokers and intermediaries

Minimum insurance coverage limits are set by specific laws and are periodically reviewed. It is worth checking the current limit applicable to your profession—it is often significantly lower than the actual potential damage.

Voluntary, yet increasingly required

IT and software developers
Business, finance, and management consultants
Engineers and maintenance specialists
Architects and designers
Marketing and public relations agenciesMarketing and public relations agencies
Translators, training and HR service providers
Health and beauty service providers

International clients often inquire about professional liability insurance during the negotiation stage. In the IT sector, the required coverage amounts frequently reach hundreds of thousands or even a million euros.

What does professional liability insurance protect against?

The insurance compensates for financial losses caused by an inadvertent error, inaccurate advice, missed deadline or lack of procedure. Legal defense costs are also covered — even if the claim is ultimately found to be unfounded.

Standard protection

Client’s financial losses due to a professional error
Inaccurate or incorrect advice
Missed deadlines and unperformed actions
Errors in document preparation and calculations
Employee errors in the performance of insured professional activities
Costs of legal defense and claim assessment

Can be expanded separately.

Errors made by subcontractors and partners
Data security and confidentiality breaches
Infringement of intellectual property rights
Additional areas of activity — training, auditing, expert assessment
Operations abroad and clients outside the EU
Retroactive protection for previous periods

In practice, the protection of legal defense is used more often than the payment itself: even the assessment of an unfounded claim requires a lawyer, and the examination of a professional dispute can take months.

How does the claim submission process work?

This is the most important distinction of this product. Professional liability insurance operates on a “claims-made” basis: the insured event is not the error itself, but the moment the client submits a claim. Therefore, the policy in effect on the day the claim is received is the one that applies, rather than the policy that was in force at the time the error occurred.

:;..

	General Civil Liability	Professional Civil Liability
What constitutes an event?	Occurrence of loss.	Submission of a claim.
Which policy applies	the one in effect at the time of the loss	the one in effect at the time of the claim
Time elapsed before the claim	usually short	often several years
Key factors when choosing	Scope of coverage	continuity of coverage and retroactive date

Why continuity is more important than price. Several years can elapse between a professional error and a claim. If, during that time, the policy lapsed, was switched to one with narrower coverage, or had its retroactive date set to a time after the error occurred, the claim might remain uncovered—even if you hold insurance today.

Therefore, when switching insurers, the most important question is not the difference in premiums, but whether the retroactive date has shifted forward. Some insurers provide retroactive coverage even for the period prior to the conclusion of the contract.

The same logic applies when winding down operations: a claim may arise even after you have ceased providing services. It is worth discussing an extension of coverage for the claim-reporting period in advance.

What does this insurance not cover?

The insurance covers unintentional errors. It does not cover intentional acts, contractual penalties, or what is essentially the refund of payment for improperly performed work.

Not included in the coverage

Intentional actions and deliberate failure to perform duties
Contractual penalties, liquidated damages, and late payment interest
Refund of the fee for improperly performed work
Services provided without a contract or free of charge
Activity not specified in the policy
Physical damage to a person or property
Claims and circumstances known prior to the conclusion of the contract

Covered by separate products

Bodily injury to third parties → general civil liability
Executive management solutions → Directors and Officers (D&O) liability
Harm to employee’s health → employer’s civil liability
Cyber incidents → cyber risk insurance

The last point on the first card is arguably the most important: if you are aware of a potential claim or error before entering into the contract, you must declare it. Failure to disclose this information could render the policy invalid.

What determines the price of insurance?

The price depends on the profession, the scope of operations, the chosen limit, and the claims history. There are significant differences between professions: for accounting services, the premium amounts to a few hundred euros per year, whereas in the IT or consulting sectors—with higher limits—it is considerably higher.

Profession and field of activity. The magnitude of the financial damage a single error could cause is being assessed.
Annual turnover and number of specialists. Key indicators of the scale of operations.
Sum insured and annual aggregate. Often the most important factor affecting the price.
Retroactive date. The earlier it is established, the broader the protection and the higher the contribution.
Client geography. Customers outside the EU are judged more strictly due to different legal practices.
History of claims. Vertinami paskutiniai penkeri metai.
Qualification and quality control. Certifications, internal review procedures and documented work procedures improve conditions.
Deduction.

What to decide before taking out insurance

With this product, a flawed decision does not become apparent immediately, but rather years later when a claim arises. Therefore, it is worth considering the terms more carefully than with other types of insurance.

Sum insured per event and annual aggregate. The mandatory minimum amount is a starting point, not a goal.
Retroactive date. The most important parameter when switching insurers.
Definition of activities in the policy. It must cover all services actually provided, not just the main one.
Subcontractors and partners. If you make use of them, include them.
Territory and customer geography.
Protection after cessation of operations. Period for submitting claims after the termination of the contract.
Deduction.

Three questions before signing. From what date does retroactive protection apply? Does the policy list all the services you actually provide? What happens to your cover if you go out of business or change insurers?

If the answer to even one of them is unclear, a cheaper offer could turn into a costly mistake.

What you will need to fill out the questionnaire

We will retrieve the company name, address, and NACE code from the Centre of Registers—you simply need to enter the company code. It is useful to have the following ready in advance:

A description of the services provided and the share of each in the turnover.
Annual turnover and number of specialists
The desired insurance limit per event and the aggregate annual limit
Details of the existing policy — insurer, amount, retroactive date
Client geography
Claims and known circumstances over the past five years
The mandatory insurance requirement, if it applies to your profession

The questionnaire takes about 6–8 minutes to complete. If you have a current policy, it is worth having it on hand—the retroactive date and the definition of activities are the most important parameters for comparison.

Frequently Asked Questions

What is the difference between professional civil liability and general civil liability?

General civil liability covers physical harm—personal injury or property damage. Professional liability covers purely financial losses incurred by a client due to an error on your part while providing services, such as incorrect advice, a missed deadline, or a calculation or design error.

For whom is this insurance mandatory in Lithuania?

For certain regulated professions—including lawyers, notaries, bailiffs, auditors, accounting service providers, customs brokers, construction designers, and insurance intermediaries—requirements and minimum amounts are established by specific laws.

What is the minimum insurance amount?

It depends on the profession and is established by specific laws, so there is no single, uniform amount. The minimum limit is often significantly lower than the actual potential damage, so it should be viewed as a starting point rather than as sufficient protection.

What does a retroactive date mean?

This is the date from which professional activities performed are covered. If an error occurred prior to the retroactive date, the claim will not be covered, even if the policy is currently in force. When switching insurers, it is crucial to ensure that this date does not shift forward.

Are errors made by employees covered?

Yes. Coverage typically extends to errors made by company employees while performing the insured professional activities. Errors by subcontractors and partners are often included separately—it is worth checking this.

What happens if I change my insurer?

Risk represents a coverage gap. If a new policy sets a later retroactive date or a narrower definition of operations, work performed during an earlier period may remain uncovered. Therefore, when comparing proposals, the retroactive date is more important than the difference in premiums.

Does the protection apply to a claim received after operations have already ceased?

Only if specific arrangements have been made for this. Since a claim may arise years later, it is advisable, when winding down operations, to agree on extending coverage to include the period for the submission of claims.

Are legal costs covered if the claim is unfounded?

Yes, the costs of legal defense and claim assessment are generally included in the coverage. This is important because even handling an unfounded claim requires lawyers and can take months.

Related insurance products

Professional liability covers financial losses resulting from errors. These products cover related areas.

General civil liability

Physical injury to third parties arising from operations, premises, or products.

Employer's civil liability

Damage to an employee’s health in the event of an accident at work

Directors and Officers Liability (D&O)

Asmeninė vadovų atsakomybė už priimtus valdymo sprendimus

Protect your professional activities

Fill out the questionnaire to receive offers from leading Lithuanian insurers and compare not only prices but also retroactive dates and activity definitions.

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