Professional liability insurance vs general liability insurance can seem like two sides of the same coin, but they are very different forms of protection designed to meet different needs and goals in your business. Both types of insurance protect you from incurring losses from claims made by third parties due to your negligence or errors in judgment, but their coverage, cost, and exclusions are often quite different from one another, making it important to understand the differences between the two before you choose which type of policy is right for you and your business.
What is Professional Liability Insurance?
Professional liability insurance covers your legal liability for any errors and omissions. If a client files a lawsuit against you for providing poor services, professional liability insurance can cover your legal fees associated with that case. General liability is a separate policy covering property damage, bodily injury, and other similar claims that may occur from business-related incidents not specifically related to practicing law or medicine (for example: if someone trips over an extension cord in your office lobby, general liability would cover that claim). Since it is generally easier to get covered by a general liability policy, many professionals opt to combine their professional-liability coverage with their general-liability coverage.
Professional liability insurance is separate from general liability, though both protect against legal action. For example, if you accidentally injure a client while giving her incorrect legal advice, professional liability would cover any expenses she incurs because of your negligence (for example lost wages). On the other hand, if a client slipped and fell in your office due to an improperly mopped floor or a poorly placed sign, general liability would handle that claim. Professional-liability coverage can also include errors made by employees as well as third parties (for example another lawyer might be hired to do work for you). By adding professional-liability coverage on top of general-liability coverage, professionals can lower their premiums by saving money on duplicate protection.
What is General Liability?
Many times, general liability is used interchangeably with professional liability. While there is a tendency to use them both in a broader sense, they are quite different types of policies that protect two different types of risks faced by businesses and professionals. To understand more about general liability vs professional liability and know what you need, read on!
A general liability policy covers a broad range of business-related risks that can befall you at any time during your business operations. From property damage to bodily injury and legal costs, general liability is designed to shield you from many perils which you might come to face while running your business. Most professionals require a general liability policy even if they don’t have employees or physical assets because it also covers acts of omission on their part. This means that professionals are protected in case they unintentionally cause injury or harm to others, such as when a lawyer inadvertently misspells an important document.
Why Get a Packaged Policy?
Insurance is a tricky business, and there are countless different types of policies to protect you against disaster. You might already have general liability insurance to protect you in case someone falls down your staircase or sues you because they slipped on a spilled latte, but what if they're a client or a vendor? Professional liability insurance protects you in those instances. You can read more about it here, but if you're looking for specific guidance on which policy to choose, consider these options: general liability vs professional liability insurance; these are two very different types of policies. General Liability Insurance is typically included as part of an umbrella policy; it will cover injuries from slip-and-fall accidents and similar issues that occur in public spaces.
Professional liability insurance is a type of policy that provides protection to you in case your work results in an injury or financial loss. If you're a freelancer or consultant, it's typically required by your client, so if you want their business, it's something you'll need to have. Professional liability policies usually have higher premiums than general liability policies because they are seen as riskier; a professional-liability policy will cover both personal and property damage up to certain limits.
If you're interested in learning more about professional liability insurance vs general liability, contact us for more information today! We're here to help all entrepreneurs make smart business decisions.
Tips for Deciding on What Type of Coverage You Need
When it comes to business insurance, there are two basic types you’ll encounter: general liability and professional liability. Depending on your business type, one may be more important to get than the other. For example, an accountant probably needs general liability coverage because of their clients’ financial information—but a writer doesn’t necessarily need it. The easiest way to figure out what you need is to ask yourself: Are my clients at risk? If so, go with professional liability; if not, stick with general liability. Of course, that's just a rule of thumb. It's best to speak with an agent about your situation as well as coverage options in your area/industry so you can choose wisely for yourself.
If you own a business, insurance is an essential part of running it. While there are a lot of different options out there, it’s most important to have general liability and professional liability coverage. In simple terms, general liability is your protection against claims filed by people who were injured on your property or had property damaged while they were at one of your events; professional liability refers to claims related to you or your employees' professional negligence for example if an accountant gives bad advice and someone loses money as a result.
