General Liability Insurance vs. Professional Liability?

We talk to numerous small business owners each day and a common question that gets brought up is: “What’s the difference between general liability insurance and professional liability insurance?”

It’s a great question, because a lot of time small business owners will just say “I need liability insurance”, without specifying which kind.

General liability insurance usually covers:

Bodily injury and/or property damage to third parties…think slip and fall or break and damage. For instance, if a customer visits your place of business and accidentally trips over something and gets hurt, the General Liability would respond. Or, let’s say you are out at a client’s place of business, perhaps you’re a consultant, and you accidentally damage some of their property or equipment, the General Liability policy would respond. General Liability also covers claims arising out of products you manufacture, sell, or distribute within the marketplace, in addition to some other coverage areas you can read more about here from the Insurance Information Institute.

Professional liability insurance usually covers:

First and foremost, know that Professional Liability insurance is also referred to as Errors and Omissions (E&O) insurance. This type of coverage protects you against claims arising out of the professional services/advice/recommendations you provide. For instance, if you’re a divorce mediator and you provide a client with a recommendation they act on and then they end up suing you down the road because they believe the recommendation was a bad one, the Professional Liability policy would respond, not the General Liability policy. Or, perhaps you’re a website designer and you agree to complete a client’s website by a certain deadline but you fail to meet the deadline. If the client were to sue you, the Professional Liability policy would respond. You can learn even more about Professional Liability by reviewing this article written by the Insurance Information Institute.

Contact us if you want to lear more about these types of liability insurance.

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This post was written by SMB Insurance