General Liability vs. Professional Liability: What’s the Difference?

Running a business comes with risk, but not every business faces the same kind of risk. A customer could slip and fall at your office. An employee could accidentally damage a client’s property. Or a client could claim that a mistake in your professional services cost them money.

Those situations sound very different because they are. And they may call for different types of liability insurance.
General liability and professional liability insurance both help protect businesses from the financial impact of certain claims and lawsuits, but each covers different types of risk. Understanding that difference can make it easier to figure out which coverage your business may need.

What Does General Liability Insurance Cover?

General liability insurance primarily addresses claims involving physical risks and certain personal or advertising injuries associated with a business’s operations, premises or products.

For example, general liability may come into play if:

• A customer slips on a wet floor and is injured
• Your business accidentally damages someone else’s property
• A customer is injured as a result of a product or service
• Your business faces certain claims involving personal or advertising injury

Think of general liability as protection for many of the everyday risks that come with interacting with customers, vendors and the public.

One important distinction: general liability generally doesn’t cover an employee’s work-related injury. Workers’ compensation insurance covers these types of workplace injuries and illnesses.

What Does Professional Liability Insurance Cover?

Professional liability insurance, sometimes called Errors and Omissions (E&O) insurance, focuses on a different type of risk: claims arising from the professional services a business provides.

It can help protect a business when a client alleges that negligence, an error or an omission in a professional service caused them a financial loss.

Imagine an accountant makes an error on a client’s tax return that results in a penalty. Or a web developer makes a mistake on an e-commerce site that leads to lost sales. Those aren’t necessarily physical injuries or property damage, but they could still lead to a costly claim or lawsuit.

Professional liability can be particularly important for businesses that provide advice, expertise or specialized professional services, including consultants, accountants, attorneys, technology professionals, designers and other service-based businesses.

General Liability vs. Professional Liability: Do You Need Both?

General liability and professional liability cover different risks, so many businesses may benefit from having both. General liability typically addresses physical risks like bodily injury or property damage, while professional liability focuses on claims involving errors, negligence or omissions in professional services.

Depending on your business, certain coverage may also be required by a client, contract or lease. We can help you evaluate your risks and determine which coverage, or combination of coverages, makes sense for your business.