Although they may seem similar, every type of business insurance has its specific coverage and policies. For example, two policies often confused by people are general liability and professional liability insurance. What is the difference between these two types of policies? Read on to find out.
What Is General Liability Insurance?
We’ll begin with general liability insurance, which provides coverage for damages or injuries that you or your business may be held liable for.
General liability covers lawsuits for property damage, personal injury, and advertising injury claims.
From an injury on your business property to a faulty product that causes harm to a customer, general liability insurance protects your business from a wide variety of liability claims.
What Is Professional Liability Insurance?
Professional liability insurance, aka errors and omissions (E&O) insurance, is a type of liability insurance that primarily protects professionals who operate their own businesses against claims of negligence
If you’re a professional, it’s essential to have professional liability insurance in place because it covers you when a client accuses you of professional negligence.
For example, if an engineer designs a system and omits critical structural components, resulting in costly damage down the road, professional liability insurance will pay for the damage.
Differences Between General and Professional Liability Insurance
The primary difference between general liability and professional liability insurance is that general liability insurance only covers physical harm or property damage.
On the other hand, professional liability insurance protects professionals who operate their own businesses against claims of negligence
Additionally, not all businesses require general liability insurance, whereas professional liability insurance is mandatory in certain professions either by industry regulations or by law.
Wrapping It Up
Professional liability insurance and general liability insurance may seem like similar coverages on the surface, but they differ significantly in terms of coverage and purpose.
General liability covers physical harm or property damage, while professional liability covers your business for professional mistakes and negligence costs.
Do You Have Insurance Questions? Contact Our Experts Today
Understanding your business’s specific needs is vital in determining which insurance coverage works bst for you.
With the right insurance coverage in place, you can run your business enjoying security and peace of mind.
Need Commercial Insurance? Carter Bradley Insurance Solutions Can Help
At Carter Bradley, our team is solely focused on your unique needs to find the best prices and coverage you require for your business, home, auto and life insurance.