General Liability vs Professional Liability Insurance

A common question among small business owners is, “What’s the difference between general liability and professional liability insurance?” Understanding how they compare and contrast will help you make the best decisions when matching your small business liability risks to individual coverages. You may find you need both.

How they're the same

General liability and professional liability insurance are both designed to:

Protect against business liabilities - A single lawsuit could damage a business beyond repair. General liability and professional liability help alleviate the financial burden these incidents cause, so your business feels minimal impact following a claim.

Meet contractual requirements - Some employers or clients may require you carry a specific amount of general liability or professional liability coverage before you can work for them.

How they're different

The difference between general liability and professional liability is the types of risk they cover. General liability protects against physical injury to people or damage to property arising from your daily operations. For example, a customer who falls through a board on their newly built deck could sue the hired contractor for faulty workmanship and bodily injury.

Professional liability covers negligence related to professional services or advice. It’s generally related to financial loss vs physical injury or damages. For example, a consultant could face a lawsuit for providing bad advice that resulted in financial loss to their client. No one was injured and no property was damaged, like in a general liability claim. This coverage is sometimes referred to as errors and omissions insurance, or E&O.

This article is brought to you by our carrier partner, Progressive.

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