General Liability vs. Professional Liability Insurance: A Comparison

If you need business insurance you’re probably confused about all the types of insurance you’re hearing about.

I mean, how many types of liability policies are there? Well actually … quite a few, but we don’t want to overwhelm you. Today we are just going to dive into two of the most important … general liability and professional liability.

Unless your business is also insurance-related, like ours at Berry Insurance, you might not know a lot about the two policies and you probably have questions.

What are the policies? Are they the same thing? What’s the difference between the two? What do they cover? What don’t they cover? Do I really need both? We’ll answer all these questions and more in the following article.

What is general liability insurance?

General liability insurance (often referred to as just liability insurance, or business liability insurance) is a type of business insurance policy that covers claims made against your business from someone who experienced bodily injury or property damage (whether you actually were at fault or not). It can also provide coverage for injuries sustained from your product, claims for libel, slander or defamation, and claims filed by your employees or other 3rd-parties.

Here’s a list of what’s usually covered under general liability insurance:

• Injuries to someone else for an accident you cause
• Damages to someone else’s property
• Contractual liability (limited)
• Coverage for your products (limited)
• Advertising and personal injury coverage
• Pollution (optional)
• Emergency medical payments (optional)
• Electronic data/cyber liability (optional)
• Claims made against you by your employees (optional)

And here is what is NOT usually covered by general liability:

• Intentional bodily injury or property damage
• Employee work-related illness or injuries
• Mistakes from your professional services or advice
• Damages to or caused by company vehicles
• Damages to goods being loaded to, or unloaded from a vehicle

To learn more about general liability insurance, including limits, costs, and what to do if you need to prove general liability insurance with a certificate of insurance, check out this article: What is General Liability Insurance?

What is professional liability insurance?

Unlike general liability insurance, which covers bodily injury and property damage claims, professional liability insurance (also known as errors and omissions insurance) covers claims made against your business as a result of the services you provide. Examples of these claims could be for negligence, misrepresentation or even inaccurate advice. 

Here’s a list of what’s usually covered under professional liability insurance:

• Claims made against you from your professional services or advice
• Claims made against you from work done in the past
• Claims against your employees’ actions.

And here is what is NOT usually covered by professional liability:

• Injuries to someone else for an accident you cause
• Damages to someone else’s property
• Advertising and personal injury coverage
• Work-related injuries or illnesses
• Electronic data/cyber liability

To learn more about profession liability insurance, including costs and common claims scenarios, check out this article: What is Professional Liability Insurance?

Do I need both general liability and professional liability insurance?

Before reading this article you may have thought what many of our business clients have thought at one point: “I don’t need professional liability insurance … I already have general liability insurance.”

But as you now can see, that is not true. General liability and professional liability insurance cover completely different scenarios, so yes, you may need both.

Depending on your state, and at times, the lenders or professional partners you work with, you could be required to have one or both of the policies, but even if you are not technically required: let us repeat ourselves. If you provide any professional services, you really do need both of these policies. 

Whether you are a sole proprietor operating under your personal name, an LLC, partnership, non-profit or corporation, if you provide any professional services, these policies together can cover you from a wide range of possible scenarios  — scenarios which could leave you with a detrimental out-of-pocket cost if you weren’t covered by the insurance.

If you are a business that solely sells goods with no associated services, you do not need professional liability insurance.

Cover your business from all angles:

We get it. Based on the names alone, the idea of having both general liability and professional liability insurance can seem redundant.

But they are in fact separate policies both covering very different things.

And unfortunately, this is just how insurance works. If you have a business, you will need several policies covering your business from a wide variety of potential exposures.

While this may seem overwhelming, working with an independent insurance agent (like us at Berry Insurance!) can make it easier by learning about your specific needs and setting you up with a comprehensive business insurance policy with the right coverages at the right price.

Almost ready to get a quote? Before that time comes, we suggest you prepare by reading this article: What Information Do I Need for a Business Insurance Quote?

You can also click on the article below to download a worksheet that can help you prepare all the information you’ll need when you apply!