One question we are often asked is, “What is the difference between general liability and professional liability insurance? If I have one of these insurance policies, why would I need the other?”
When looking at business insurance, remember that the kinds of risks businesses face can be significant. So can the costs associated with these types of risks. Not only are you insuring the risk of your business, its property, and employees, but those who come into contact with your business and employees. Your general liability insurance policy will cover these risks. Professional liability insurance will cover these risks as well, although it will also include coverage that is more specific to certain professions and scenarios.
A general liability policy typically insures against claims of bodily or personal injury or property damage, sustained by a third party. The general liability policy will cover the legal fees and costs associated with your legal defense, settlements, and property damages.
Professional liability insurance, also known as errors and omissions or E & O insurance, covers negligence as it pertains to the professional services you provide. Generally, although not always, it is a claim involving financial damages, versus a claim of physical injury against your business. Typically, this type of coverage applies to professions where there is a professional code of conduct or standards which are used as a measure for evaluating how your services should be judged. Naturally, this is all subject to interpretation and is usually determined through the courts.
With either general or professional liability, one claim can be financially devastating to a business. Sometimes damages and injuries are real, and need to be addressed; other times, lawsuits can be baseless and frivolous. But regardless, you need to be prepared for either occurrence. Work with your licensed insurance professional to determine if a professional liability insurance policy is necessary for your business and also for any employees who may also work with clients providing services, or if a general liability insurance policy will suffice.
Click here to start the process of a free quote for either professional liability insurance or a general liability insurance policy, or call us at 1-877-907-5267 to speak with one of our specialists for further clarification about general liability insurance vs. professional liability insurance.
Risk management is an art, and our business is helping you protect your business.