What is the Difference Between General Liability and Professional Liability Insurance?

You buy a General Liability policy to protect your business and you are a Professional, so aren't these two policies the same? Not even close!

General liability insurance covers your business if someone gets hurt or their property is damaged on your property or because of your business. The most common General Liability claim is the slip and fall claim. For this type of claim, General Liability insurance will cover the associated medical bills and any other damages that the claimant incurs.

Professional liability insurance covers your business if someone claims that you made a mistake, failed to meet the terms of your contract, provided incorrect advice, were negligent, or other similar claims, in the professional services you provided to them. For example, if you're a painter and you sign a contract stating that the work will be fully completed by a specific date and the client claims that you failed to meet that deadline, they could file a claim against you for breech of contract. Another example is if you are an accountant and you make a mistake on the tax return that causes the client to face financial penalties, the client can file a claim.

Both general liability and professional liability insurance are important for businesses of all sizes, but one policy protects the policyholder from claims against bodily injury (slip and falls) and property damage (damage to a valuable vase) while the other protects the policyholder from claims that are financial in nature.

One other way to look at the difference between the two policies is in their names - General Liability is for "general" claims that could occur to any business. Professional Liability is for potential claims that are specific to your "profession".

If you're not sure which type of insurance you need, talk to your local independent insurance agent. While any insurance agent will be able to provide you sound advice, an independent insurance agency has access to a variety of carriers to help find the one that best meets your business's specific needs.