If you are looking for a professional liability insurance definition, you will find that it is slightly different depending upon your profession. For example, a private practice physician's professional liability coverage will be geared toward the risks of the medical profession, whereas a realtor's concerns are related to buying and selling homes. However, it is essentially defined as legal protection from "errors and omissions" that may occur as a result of performing professional services. This means it will cover you for mistakes you make as well as your negligence - things you fail to do - that result in a client's loss.
In practice, it means that if a client claims that your services, advice, or expertise have caused a personal or professional loss, you have insurance that will cover your legal defense and the costs associated with resolving a lawsuit. Litigation can be a drawn-out-process that can cost hundreds of thousands of dollars.
Professional liability insurance is a reliable way to protect your business assets. If you're sued, professional liability insurance coverage helps pay for defense costs as well as any settlements or judgments that you must pay.