Professional Liability Insurance
What Happens If You Cancel Professional Liability Mid-Project?
Canceling PL mid-project is extremely risky. On a claims-made policy, any claim filed after cancellation — even for work done during the project — goes uninsured.
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What happens if I cancel my professional liability insurance during an active project?
Professional liability is claims-made. Coverage requires the policy to be active when the claim is filed — not just when the work was done. If you cancel mid-project and the client files a claim two years after project completion, your cancelled policy provides zero coverage.
Practical consequences: you’re personally responsible for all legal defense costs and any judgment or settlement. For a significant professional liability claim, this can mean $200,000–$1M+ in uninsured exposure.
If cash flow forces a coverage decision, talk to your agent about options — reducing limits, increasing the deductible, or a payment plan — before canceling. Maintaining coverage in some form is almost always better than cancellation.
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