Here's something most veterinarians don't think about until it's too late: even when you do everything right, you can still get sued. A pet owner whose dog doesn't survive surgery might believe you made a mistake. A misdiagnosis that any reasonable vet could have made becomes the basis for a lawsuit. Maybe you prescribed a standard medication, but the owner claims you didn't explain the side effects clearly enough. Suddenly, you're facing legal bills that could run into six figures.
That's where professional liability insurance—also called errors and omissions (E&O) coverage or veterinary malpractice insurance—comes in. It protects you when clients claim your professional services caused harm to their animals. But not all policies work the same way, and the differences matter more than you might think.
What Professional Liability Insurance Covers
Professional liability insurance covers the legal and financial fallout when a client alleges that your professional services caused harm. The most common claims fall into four categories: misdiagnosis or delayed diagnosis, surgical errors (like operating on the wrong site, leaving instruments inside an animal, or anesthesia mistakes), improper treatment (administering the wrong medication or dosage), and failure to obtain informed consent before procedures.
Your policy typically pays for your legal defense, including attorney fees, court costs, and expert witnesses. This matters because defending a malpractice lawsuit can easily cost $50,000 or more, even if you win. If you lose or settle, the policy covers the judgment or settlement amount up to your policy limits. Standard coverage for small animal practices usually provides $1 million per claim and $3 million in total annual coverage, though you can purchase higher limits up to $6 million per claim if your practice requires it.
One detail that catches veterinarians off guard: in most states, animals are legally considered property. That limits what pet owners can recover in damages—typically just the cost of additional medical treatment, the animal's fair market value, and possibly the purchase price. You generally won't face massive pain and suffering awards like in human medical malpractice cases. But lawsuits still happen, and the legal costs alone justify having coverage.
Claims-Made vs. Occurrence: Why This Decision Matters
Most veterinary professional liability policies are written on a claims-made basis. This is the single most important thing to understand about your coverage, because it works differently than the insurance you're used to.
A claims-made policy only covers claims that are reported while your policy is active. It doesn't matter when the alleged incident happened—what matters is when the claim is filed. So if you treated a patient in 2024, but the owner doesn't sue until 2026, you need to have a claims-made policy in effect in 2026 for coverage to apply.
An occurrence policy works the opposite way. It covers incidents that happen during the policy period, regardless of when the claim is filed. If you had an occurrence policy in 2024 when you treated that patient, you'd be covered for claims filed in 2026, even if you let that policy lapse years ago. Occurrence policies sound better, right? They are—but they're also more expensive and harder to find for veterinary practices.
With a claims-made policy, you need to understand two critical concepts: the retroactive date and tail coverage. Your retroactive date is how far back in time your policy will cover incidents. If your retroactive date is January 1, 2023, and you treated a patient in December 2022, a claim from that case won't be covered—even if it's filed while your policy is active. When you buy your first claims-made policy, the retroactive date is usually the policy start date. The key is maintaining that same retroactive date as you renew each year.
Tail coverage, formally called extended reporting period coverage, is insurance you buy when you cancel or don't renew a claims-made policy. It extends the reporting period so you can file claims for past incidents even though your policy is no longer active. You'll need tail coverage if you retire, switch insurance companies, or take a break from practice. Tail coverage can cost 1.5 to 3 times your annual premium, so it's not cheap—but going without it leaves you exposed to claims from your entire career.
Defense Costs: Inside or Outside Your Limits?
Here's a question most veterinarians never think to ask when buying professional liability insurance: are defense costs included in your policy limits or paid in addition to them? The answer can mean the difference between full coverage and a massive out-of-pocket expense.
Some policies pay defense costs inside the limits. If you have a $1 million policy and spend $300,000 defending a lawsuit, you only have $700,000 left to pay a settlement or judgment. That's problematic if you face a serious claim. Other policies—like those from AVMA PLIT—pay defense costs outside the limits, meaning your full $1 million remains available for settlements or judgments regardless of legal fees. This is a huge advantage and worth paying extra for.
Also ask about your right to choose your own attorney. Some policies require you to use defense lawyers selected by the insurance company. Others give you more control over who represents you. If you're facing a claim that could affect your license or reputation, having input on your legal representation matters.
What It Costs and What Affects Your Premium
Professional liability insurance for veterinarians is surprisingly affordable compared to coverage for human healthcare providers. For 2025, small animal veterinarians typically pay between $250 and $500 annually for a policy with $1 million per claim and $3 million annual aggregate limits. That's less than most vets spend on continuing education in a year.
What you pay depends largely on what type of animals you treat. Small animal exclusive practices pay the least. Equine veterinarians face premiums about 10 times higher because large animal work involves more physical risk and higher-value animals. Mixed animal practices fall somewhere in between. Your practice location, years of experience, and claims history also affect pricing.
You can often reduce your premium by agreeing to a higher deductible or choosing lower coverage limits, but this is one area where skimping usually doesn't make sense. The difference between a $250,000 policy and a $1 million policy might only be a few hundred dollars a year—not worth the risk of being underinsured if you face a serious claim.
License Defense Coverage: Don't Overlook This Add-On
Board complaints are on the rise. When a client files a complaint with your state veterinary board, you need legal representation to respond—but standard professional liability insurance doesn't always cover those costs. License defense coverage pays for attorneys and related expenses when you're facing a board investigation or disciplinary action.
This coverage typically costs between $100 and $200 per year and is worth every penny. Even if a board complaint is frivolous, you'll need legal help navigating the process. Many insurers offer it as a package with professional liability coverage. For example, AVMA PLIT's 2025 small animal package includes both professional liability and license defense for $476 annually—just $163 of that goes toward license protection.
How to Get Started
If you're employed by a veterinary practice, check with your employer first. Many practices carry professional liability coverage that extends to associate veterinarians. If you're covered under an employer's policy, make sure you understand what happens if you leave—you may need tail coverage or your own policy to protect against claims from patients you treated while employed there.
If you're a practice owner, relief veterinarian, or independent contractor, you definitely need your own coverage. Start by getting quotes from insurers that specialize in veterinary professional liability. AVMA PLIT is the largest provider and offers competitive rates for AVMA members. Pharmacists Mutual and other specialty insurers also serve the veterinary market. Compare not just premiums, but policy features: claims-made versus occurrence, defense costs inside or outside limits, license defense coverage, and whether tail coverage is available.
Once you have coverage, maintain it continuously. A gap in coverage can create permanent holes in your protection under a claims-made policy. Review your policy annually to make sure your limits are still adequate as your practice grows. And if you ever receive a claim or board complaint, notify your insurer immediately—most policies require prompt notice, and delays can jeopardize your coverage.
Professional liability insurance won't prevent lawsuits or board complaints, but it ensures they won't destroy your career or finances when they happen. For a few hundred dollars a year, you get peace of mind that someone else will handle the legal bills and settlements if a client questions your professional judgment. That's a bargain.
