Professional Liability VS General Liability Insurance

Key Differences Between Professional Liability and General Liability Insurance

As a business owner, you must account for many risks and exposures that could adversely impact your finances and reputation. Mishaps and mistakes are inevitable, and lacking appropriate preparedness could incur catastrophic consequences. Situations in which you’re potentially at fault for other parties’ losses and damages can be particularly impactful, as you may face public scrutiny, reputational harm and fiscal ramifications.

Understanding appropriate liability insurance can make all the difference.

What is Professional Liability Insurance?

Also known as errors and omissions insurance, professional liability insurance is a common facet of many businesses’ loss control measures. It is particularly prevalent in the risk management plans of companies providing services and guidance, such as consultants, contractors and advisors.

If clients or customers accrue losses for which they believe you’re to blame, they may sue, potentially costing you attorney fees, settlements and judgments. Fortunately, professional liability insurance can help pay for such costs. Specifically, your policy may help with any of the following allegations:

• Professional errors

• Inaccurate advice

• Misrepresentations

• Oversights

• Omissions

• Negligence

• Missed deadlines

• Breaches of contract

What is General Liability Insurance?

As another common fixture of business insurance packages, general liability coverage can cast a versatile, multifaceted financial safety net across many common incidents. Like professional liability insurance, these policies may provide a buffer against your business and third-party losses for which it may be at fault.

Although exact parameters may vary, your general liability insurance policy may offer financial aid in the wake of the following incidents involving other parties:

• Bodily injuries—If a customer, guest or passerby is harmed in an incident for which you’re to blame, your policy may help pay for their medical expenses and financial losses.

• Property damage—Your policy can offer funds for repair and replacement costs if you’re responsible for damaging another party’s property.

• Personal and advertising injuries—This part of your policy may cover losses and legal expenses if you’re allegedly at fault for personal injuries and reputational harm, such as via slander or libel.

What Insurance Do I Need?

While both professional liability and general liability insurance policies provide financial protection from third-party losses, they each have limitations regarding the incidents and losses to which they may respond. In many cases, your business may require both forms of coverage to ensure a sufficient insurance portfolio.

We’re Here to Help

At TechFirst Insurance Agency, we can help you understand liability coverage options and secure appropriate policies. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.