General Liability vs. Professional Liability Insurance

It is not uncommon to get questions regarding the difference between general liability insurance and professional liability insurance. We will explore the two policies, what they cover, and which policy—if not both—you may need.

A family signs paperwork with a professional consultant who's legal advice may be insured with Professional Liability Insurance.
A business owner works with a general liability insurance policy covering his business.

What Is General Liability Insurance?

Commercial General Liability insurance—also known as public liability insurance—is designed to protect you from third-party bodily injury and property damage claims you become legally obligated to pay.

General liability claims are usually triggered by third-party bodily injury or property damage claims. It’s the most common type of liability insurance purchased by business owners across the nation.

What Does General Liability Cover?

A business owner smiles in her store.

General liability insurance covers damages to others arising from the daily operations of a business:

Although general liability policies provide an array of coverages, every policy has limitations and exclusions. Common exclusions include: 

A business owners looks through paperwork.

Common General Liability Claims

The most common general liability claims are slip-and-fall incidents and accidental property damage. Here are some examples of what a covered general liability claim may look like: 

Who Needs General Liability Insurance?

A business owner holds product plans.

Virtually every business has operations exposing them to claims and lawsuits that could cost thousands of dollars to defend—not including the costs of judgments. Although it may not be required by law, it is highly recommended that every business that provides services or products to the public purchase a general liability insurance policy.

A professional gives advice to a couple.

What Is Professional Liability Insurance?

Professional liability insurance protects against financial loss and claims arising from negligence, misrepresentations, mistakes, or malpractice due to your professional services. These types of claims are usually excluded by a general liability policy.

Professional liability insurance is also referred to as:

What Does Professional Liability Cover?

An advice professional takes notes with a client.

Professional liability covers individuals and companies from economic loss resulting from your errors, negligence, inaccurate advice, misleading statements, and breach of duty.

Professionals are expected to have extensive knowledge and training in their respective trades and field. When they cause financial harm due to their lack of execution in their field, they are exposed to claims and lawsuits that can cost thousands to mitigate.
Some examples of common professional liability claims include: 

A personal trainer gives advice to a student.

Who Needs Professional Liability Insurance?

Anyone who provides advice or services for a fee should explore professional liability coverage.

Common professions requiring professional liability insurance include:

How Are General & Professional Liability Insurance Similar?

A professional smiles from her desk.

General and professional liability insurance do have some similarities. For instance, most people find they need one or both of these coverages in order to be employed or do business.

Both professional and general liability insurance allow you to defend yourself against third party claims. This means your business operations or services caused injuries or damages to someone else who was not you or an employee.

Professional liability vs general liability starts to differ when you look at what each policy specifically covers. 

A distributor smiles inside of a warehouse.

What Are The Differences Between General Liability and Professional Liability Insurance?

General vs professional liability has one large difference: general liability focuses on the risks your operations carry and professional liability focuses on the risks your services carry.

General liability insurance covers claims arising from more physical risks such as bodily injury, property damage, product liability, advertising injury, and medical payments to a third party.

Professional liability covers risks that cause financial harm to a third party due to the professional services, or lack thereof, arising from bad advice, missed deadlines, and inadequate or inaccurate work.

Do I Need Both General Liability And Professional Liability?

Almost every business has a need for general liability insurance; it helps protect against common risks that can cause physical harm from your daily business operations, like a slip-and-fall. Professional liability responds to claims and lawsuits arising from financial loss caused to a third party because of your professional services or products.

If you have a service-based business and charge a fee for your advice or services, you should carry a professional liability policy. Every business should carry general liability insurance at a minimum to help you manage the risks your business may cause in your dealings with the public.

Because general liability and professional liability cover two different exposures, you may need both depending on your business operations. Understanding the difference between professional vs general liability is important so that you can make informed decisions about the coverages required to protect you and your business.

Discussing your current, pending, and future operations with an insurance professional can help determine the exposures of your business and the type of insurance coverage you will need to protect it.

Insurance Canopy represents some of the largest insurance carriers in the nation. We can assist you in procuring the general and professional liability coverages you need.

We can also assist in obtaining additional coverages to protect your business—such as property insurance, worker’s compensation, cyber insurance, commercial auto, product liability, and product recall insurance.

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