What is the difference between general liability insurance and professional liability insurance?
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As a lawyer, the difference between general liability insurance and professional liability insurance is an essential concept to understand. Both types of insurance policies provide financial protection, but they cover different types of risks.
General Liability Insurance
General liability insurance protects businesses against claims arising from bodily injury, property damage, and personal injury. This type of insurance coverage is designed to cover accidents occurring on business premises or those caused by business operations in other locations. General liability insurance typically covers legal defense fees, settlements, or judgments against the business.
Professional Liability Insurance
Professional liability insurance (also known as errors and omissions coverage) protects professionals in a specific industry, such as doctors, architects, engineers or attorneys against claims arising from errors or omissions made in the course of providing professional services. This type of insurance policy typically covers legal defense fees, as well as damages and settlements paid to the claimant.
The key difference between general liability insurance and professional liability insurance lies in the types of risks they cover. General liability insurance covers claims for physical harm or property damage, while professional liability insurance covers claims for failure to provide professional services according to agreed-upon standards or mistakes made while performing professional duties.
If a business only carries general liability insurance, it may not provide sufficient coverage for certain types of incidents or accidents that could occur while providing professional services. In contrast, a professional services provider, such as a doctor or a lawyer, may not face as many risks of bodily injury or property damage as other types of businesses, so they may not need general liability insurance.
It's important to note that both types of insurance policies may have exceptions, exclusions, and limitations. It's essential to read the policy terms carefully and consult with an insurance attorney to ensure adequate coverage for all types of risks.
In conclusion, businesses facing risks of physical harm or property damage should consider carrying general liability insurance, while professionals who provide professional services in a specific industry should consider carrying professional liability insurance. However, every business and individual is different, so it's essential to consult with an experienced insurance attorney in your jurisdiction before making any decisions.
