Understanding General Liability vs. Professional Liability

Whether you’re just starting your business or have been running it for years, understanding the types of insurance your business may need is critical to managing risk. Two of the most common forms of business insurance are general liability and professional liability. While they may sound similar, they address different types of exposures and serve distinct purposes.

What Is General Liability Insurance?

General liability insurance is designed to help protect businesses from a variety of common risks, including:

• Bodily injury on your business premises or due to your operations
• Property damage caused by your business
• Personal and advertising injury (such as libel or slander claims)

This type of insurance is often considered foundational for most businesses. If a customer slips and falls in your store or if a subcontractor accidentally damages a client’s property, general liability may help cover legal fees, settlements, or medical costs.

What Is Professional Liability Insurance?

Professional liability insurance, also known as errors and omissions (E&O) insurance, is intended for businesses that provide specialized services or professional advice. It may help cover:

• Claims of negligence
• Misrepresentation
• Inaccurate advice
• Failure to deliver a promised service

This is especially important for consultants, accountants, architects, attorneys, and other professionals where a mistake or oversight could lead to financial loss for a client. Even if you didn’t make an error, professional liability may help cover legal defense costs if you’re accused of making one.

Key Differences Between the Two

General liability helps protect against third-party bodily injuries and property damage – physical incidents that can occur on your premises or as a result of your operations. In contrast, professional liability focuses on claims related to the services or advice you provide. If your work causes a financial loss or you’re accused of making a mistake, professional liability may help cover the costs.

General liability is best suited for businesses that interact with the public, such as retailers or contractors, while professional liability is more important for those who provide professional services, like consultants, accountants, and designers.

Does Your Business Need Both?

Some businesses in Virginia may need both types of coverage. For example, an IT consultant who works from an office may be exposed to physical risk (a client slips and falls while visiting) and professional risk (a software error leads to a client’s financial loss). In such a case, both general and professional liability insurance may help address potential exposures.

Get Help Choosing the Right Coverage

Understanding the nuances between general liability and professional liability is an important step toward building a strong insurance strategy for your business. The team at Robins Insurance is here to answer your questions and help you evaluate the risks your business may face.

To learn more or to review your current business insurance options, contact us today.