Introduction
Businesses often confuse professional liability insurance with general liability insurance. Both protect companies from risks, but they cover different types of claims. Choosing the right coverage requires understanding how each works and which risks they address.
This guide explains the differences between professional liability and general liability, when each is needed, and how to use them together.
General Liability Insurance
What It Covers
General liability insurance protects against claims related to:
- Bodily injury to third parties
- Property damage to others
- Personal and advertising injury
- Legal defense costs for covered claims
Typical Scenarios
- A client slips in the office lobby
- A delivery worker’s equipment is damaged by office machinery
- Marketing materials result in a defamation claim
General liability does not cover professional mistakes, errors, or negligence in services.
Professional Liability Insurance
What It Covers
Professional liability insurance, also called Errors and Omissions (E&O) insurance, protects businesses from claims of:
- Negligence
- Errors or mistakes in service delivery
- Missed deadlines or contract breaches
- Misrepresentation of services or advice
Typical Scenarios
- A consultant provides advice causing client financial loss
- An IT firm misconfigures software leading to downtime
- A marketing agency misses a campaign deadline causing revenue loss
Professional liability does not cover bodily injury or property damage.
Key Differences
| Feature | General Liability | Professional Liability |
|---|---|---|
| Covers bodily injury | Yes | No |
| Covers property damage | Yes | No |
| Covers errors in services | No | Yes |
| Covers legal defense | Yes | Yes |
| Required by landlords/contracts | Often | Often for service-based clients |
| Typical users | Offices, retail, contractors | Consultants, agencies, IT, accountants |
Why Both May Be Needed
Many businesses require both coverages:
- General liability covers physical risks in the office
- Professional liability covers financial risks from advice or services
Example: An IT consultancy with a client office needs:
- General liability: Covers a visitor injured in the office
- Professional liability: Covers system misconfiguration causing client revenue loss
Having only one policy may leave gaps.
Choosing the Right Coverage
- Identify the business activities
- Determine exposure to physical risks (bodily injury, property damage)
- Determine exposure to service-related risks (errors, negligence)
- Review client or contract requirements
- Evaluate policy limits and deductibles
SEO FAQ Section
Can a business have both policies?
Yes. Many service-based businesses carry both to cover different risks.
Is general liability enough for consultants?
No. Consultants need professional liability to cover errors in services.
Does professional liability cover office accidents?
No. Physical injuries or property damage require general liability.
Are policy limits important?
Yes. Per-claim and aggregate limits determine maximum coverage for each type of claim.
How often should coverage be reviewed?
Annually, or whenever services, clients, or office operations change.
Final Thoughts
General liability and professional liability insurance serve distinct purposes. General liability protects against physical risks, while professional liability protects against mistakes, negligence, or errors in services.
Service-based offices, consultants, and agencies often need both to ensure comprehensive protection. Understanding the differences and combining policies where appropriate reduces financial risk and maintains client trust.
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