General liability vs. professional liability insurance
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 my small business need the other?” In this quick guide we explain how the policies are similar, what each of them cover, and how to get a quote for both.
How General Liability Insurance and Professional Liability Insurance are Different
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.
This insurance policy will cover risks associated with third party injury and damage to third party property while customers are in your business or on your property. Professional liability insurance covers risks associated with more abstract occurrences associated with your business, such as alleged negligence, errors and omissions, and professional errors made in the course of your job.
What Does General Liability Insurance Cover?
General liability insurance provides coverage for these areas of your business:
- Bodily injury claims: A general liability policy typically insures against claims of bodily or personal injury. This policy will cover the legal fees and costs associated with your legal defense, settlements, and medical payments.
- Property damage: Property damage sustained by a third party is covered under general liability.
- Advertising errors: If you infringe on someone's copyright unintentionally, this coverage can help cover damages.
- libel/slander: If you are sued for libel or slander, it is generally covered under this insurance policy.
Who Needs General Liability Insurance?
Every business owner should invest in general liability coverage to protect their personal investments. Accidents do happen, and when and if they do, it can mean costly lawsuits. A small business cannot afford the monetary loss associated with these claims.
What Does Professional Liability Insurance Cover?
Professional liability 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.
Who Needs Professional Liability Insurance?
If you or your business provide professional services, you need to consider adding professional liability to your insurance portfolio. Some professions are even legally required to obtain this coverage. Make sure to check with your licensing board to verify. To learn more about professional liability insurance, check out our comprehensive guide to coverage. Errors an Omissions coverage is simply another name for professional liability insurance, but is often used in reference to doctors, nurses, lawyers, etc.
General Liability vs. Professional Liability: Which do I Need?
Either type of insurance 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.
In most instances, it won't be a question of "general liability vs. professional liability" but rather, "do I need general liability AND professional liability?" Speak with an experienced agent about your small business, the services you provide, and they can help you gauge the coverage you may need.
Get a FREE Quote for General Liability and Professional Liability
Work with your licensed insurance professional to determine if a professional liability insurance policy is necessary for your business or if a general liability insurance policy will suffice.
Complete the form above 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.
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