What’s the Difference: General Liability or Professional Liability

Owning your own business can be just as frightening as it is thrilling, especially with the risks it brings. Fortunately, there are plenty of ways to reduce these risks with insurance policies. Because the world of insurance is a bit overwhelming, it can be difficult to know what policies your business really needs. One thing’s for sure – you’re going to need some type of liability coverage. The big question for you is should it be a general liability or professional liability policy?

General Liability Insurance

General liability insurance can protect your business from “general” lawsuits, as its name suggests. It comes into play should a third party (anyone who isn’t an employee) sues your business over a couple specific occurrences:

• Slander, libel, misappropriation and copyright infringement (advertising injuries)
• Injuries to their body obtained on your commercial premises
• Any damages you caused their property

General liability insurance helps cover legal expenses that come about due to a lawsuit from one of these occurrences. With this policy, you’re covered for any:

• Lawyer fees
• Settlements
• Judgments
• Court costs

No matter what industry you’re in or how small your business is, you can face these claims. They’re more general in nature and unrelated to the operational standards and procedures of your business.

Professional Liability Insurance

Professional liability insurance also lives up to the nature of its name. While general liability insurance focuses on coverages that occur regardless of the industry you’re in, professional liability insurance is specific to your type of practice and the risks associated with it.

Even though this policy is especially important for service providers, other businesses can benefit from its ability to shield you from third-party lawsuits such as:

• Incomplete/shoddy work
• Negligent professional services
• Failure in upholding contractual promises

Lawsuits incurred because of these torts are typically the most expensive. Think doctor malpractice lawsuits or improperly-made infrastructure lawsuits. By insuring yourself with a professional liability policy, you’ll be able to save your business some big money should a lawsuit ever occur.

The Bottom Line

When it comes to picking a policy that makes sense for your business, it’s important to think about how much risk is associated with your operations. General liability and professional liability cover different risk exposures. Only general liability can cover a visitor slipping and falling on your property, while only professional liability can spare you from the high cost of alleged professional mistakes. You may even need both if your business is subject to high risk.

The world is unpredictable, and you never truly know when or how an incident may occur. That’s why it’s important to set your business up with the right policies and coverages. To explore your options, reach out to us here. With over 65 years of experience, Snellings Walters knows how to identify the real issues you want to fix.