Business owners often assume one liability policy covers every situation. In reality, general liability and professional liability address very different kinds of risk, and many businesses benefit from both.
General Liability: Physical Risks
General liability generally focuses on physical risks — bodily injury and property damage claims brought by third parties. Think of a visitor injured on your premises or accidental damage to a client’s property.
Professional Liability: Performance Risks
Professional liability — sometimes called errors and omissions (E&O) — is generally designed to respond to claims arising from the professional services or advice you provide.
If a client alleges that a mistake, oversight, or failure to deliver a professional service caused them a financial loss, professional liability coverage may help respond, including with legal defense costs.
Which Do You Need?
Many service-based businesses — such as consultants, accountants, attorneys, and medical practices — carry both. General liability addresses the physical risks of operating, while professional liability addresses the risks tied to the professional work itself.
The right combination depends on your industry, the services you provide, and the contracts you enter into. A conversation with an independent agent can help clarify where your exposures lie.
Key Takeaways
- General liability covers physical injury and property damage risks.
- Professional liability (E&O) covers claims tied to your professional services or advice.
- They address different exposures and often work together.
- Service-based professionals frequently benefit from carrying both.
This article is provided for general educational purposes only and does not constitute insurance advice or a recommendation. Coverage is subject to the terms, conditions, exclusions, underwriting requirements, carrier eligibility and state availability of each policy. Please talk with us about your specific situation.
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