general liability vs professional liability

Liability Solutions for Small Business Owners

While you may be fully aware that both, general liability insurance coverage (GL) and a professional liability policy (PL) will safeguard you against lawsuits, do you know which liabilities we’re talking about? Small business insurance will protect your business from many financial woes that may come your way, but it helps to have an understanding of which policy addresses the type of risks you face.

How the two policies differ

In any discussion surrounding general liability vs professional liability, a GL policy, like its name suggests, covers your business from lawsuits that most any business could face. If a third party, meaning anyone who doesn’t work for your company, decides to sue your business over bodily injuries that were incurred on your commercial premises, or damage to their property, or slander, libel, or copyright infringement, this policy will aid you in defense of those charges.

On the other hand, PL insurance, often called errors and omissions or malpractice insurance, focuses specifically on any lawsuits that could stem from professional services that you provide to customers and clients. Professional liability insurance helps shield you from third-party lawsuits claiming that you provided negligent professional services, failed to uphold contractual promises, provided incomplete or inaccurate work, or made mistakes or omissions that resulted in a loss.

It’s a fact that, as a small-business owner, you could be falsely accused and have to defend your actions. Your GL and PL policies will work in conjunction to mitigate your expenses when accidents or oversights you’ve made land you in hot water.

Remember that general liability and professional liability cover different risk exposures. Only your GL policy can spare your business from lawsuits over a customer slipping and falling while on your commercial property, while your PL insurance will help protect you from the high cost s associated with alleged professional mistakes that cause a third party financial losses. In the battle of general liability vs professional liability there is no right or wrong answer. If you have exposures that both policies address, you’ll only have the protection you need if you invest in both policies.