In insurance, a general liability insurance policy covers you and your company for claims that involve property damage and bodily injuries that result from your services, products, or operations. If you are held responsible for the damages to your landlord’s property, then the insurance can also cover you.
Professional liability insurance is a type of coverage built to protect conventional professionals like attorneys and accountants. The policy also covers quasi-professionals, including real estate brokers and consultants, against liability incurred due to errors in performing their professional services. This article will shed more light on general liability and professional liability and their differences.
General vs. Professional Liability Insurance
It can be challenging to decide the type of insurance you need as a business owner. In every case, the appropriate policies strongly depend on the types of risks that your company experiences.
Liability risks are not exclusive to big companies. Small companies also face liability risks. However, the liability is dependent on the action the company or individual takes. As a contractor, you may be liable if a structure you built injures an individual. On the other hand, if a consulting business makes a client lose funds due to a mistake in advice, then that business is liable.
Significant Disparity Between General Liability and Professional Liability
Both general and professional liabilities fall into the category of liabilities, leading to a lawsuit. However, the difference between general and professional liability is significant, and you need to understand those differences.
General liability and professional liability cover different types of risks. When speaking of general liability, it covers physical risks like bodily injuries and property damage. On the other hand, professional liability covers completely different risks like omissions or errors in your professional service.
General Liability Coverage
There are several things that general liability insurance helps cover.

  • Bodily injury claims: Bodily injury claims include someone getting hurt in your company. Please note that this doesn’t cover employee injuries that fall under the worker’s compensation insurance category.
  • Medical payments: If anyone gets injured on your business property, the general liability covers medical bills.
  • Advertising errors: You are covered if you are charged for copyright infringement in your advertising.
  • Reputational harm: Reputational harm involves a lawsuit for malicious prosecution, slander, libel, wrongful eviction, privacy violations, and other related matters.
  • Property damage: This deals with the damage caused by your organization or employees.

Professional Liability Coverage
Professional liability insurance is generally built to protect a company if the client claims damages because of offered services. It includes coverage for errors and omissions. With the presence of professional liability insurance, a business will be covered if mistakes like the following occur:

  • If a website developer makes an error on a client’s e-commerce site which leads to missed sales chances.
  • An accountant files a wrong tax return for their client which leads to a penalty fee.
  • If a bookkeeper makes a clerical mistake that leads to the loss of a large amount of money.

Who Should take out General Liability Insurance vs. Professional Liability Insurance?
Most small business owners will benefit from general liability insurance because it protects from risks you face in common business scenarios. On the other hand, professional liability insurance is required in some states. In the health sector, medical practitioners need medical malpractice insurance, which is a type of professional liability.
Both general liability and professional liability are essential but needed for different sets of people. Do you have more questions related to personal or business insurance? Take a few moments and contact us at The Schwab Agency in Colleyville, Texas today. We look forward to assisting you with all your coverage needs.

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