The key thing to understand about PL insurance is that it is primarily designed to cover your liability to third parties (most often customers) which arises from your performance of professional services.
It’s not designed to cover all losses associated with your business, for example your liability associated with employment practices or general management of the business (these would be covered by a Management Liability policy).
Negligent advice, breaches of professional duties or other kinds of malpractice by you
Misselling of financial products
An employed financial planner who gives negligent advice to a customer, resulting in the customer suffering a loss on their investment 
Claims that you knew about before you incepted the policy
Deliberate wrongful or fraudulent acts by you
Employment disputes
Liability which does not arise out of performance of professional services, for example from a data breach or from your general management of the business
Your reputation is in many ways the true value of your business, and professional liability insurance protects that reputation.
Even the best run businesses will make mistakes from time to time, and even if you don’t some customers will claim that you have.
When that happens professional liability insurance allows you to move past the problem quickly and not get caught in costly and time consuming disputes.
The insurer steps in, settles your liability and pays the costs associated with the customer’s claim as well, leaving you to get on with your business with your reputation and financial position protected.
There are three main factors that influence the cost of the policy:
For some types of business professional mistakes are more likely to occur and more likely to be costly than others, and for those businesses professional liability is more expensive. The bigger your business is, the more professional services you provide, the more likely there will be an issue with one of those services. And finally, the more you choose for the limit the more the policy costs.
