General Liability vs. Professional Liability Insurance
General Liability vs. Professional Liability Insurance. Commercial insurance is vital part of any business. You can't operate without knowing that your business will be taken care of in the case of something going wrong, and for some businesses it is illegal to operate without valid insurance.
The types of insurance that your business needs will vary depending on your field however there are two common types of insurance that a lot of businesses definitely need; general liability and professional liability insurance.
Does your general liability or does your professional liability policy cover it? Read on to find out as we explore the differences and similarities between general liability vs. professional liability insurance.
General liability vs. professional liability insurance - learn which policy covers what and if you need one or both for your business.
General liability vs. professional liability insurance: GLI is there to protect you business from unforeseen accidents. This generally includes damage to customer's property, third party personal injury claims, or other accidents that would put the continued success of your business at risk.
General liability vs. professional liability insurance: GLI also protects your business from the financial burdens associated with;
- Property Damage or Bodily Injury - Protection from claims that stem from property damage or personal injury to customers that happened during normal business operations.
- Advertising Errors - Protection from infringement on another company's or individual's rights as a result of an oversight in your product's advertisements.
- Damage To Premises or Equipment Rented By You - Protection from the costs associated with a fire or explosion that happened while you were in charge of another party's premises or equipment.
Those are some of the key points in any commercial general liability insurance policy. These policies vary from business to business however the areas taken into consideration before the amount and cost of the coverages are issued are the business type, where the business is located, gross sales, how many employees and payroll the company has and what level of risk the company is exposed to.
General liability vs. professional liability insurance: A contractor involved in the construction business may need a more comprehensive coverage for bodily injury and a lawyer's coverage will concentrate more on malpractice insurance.
Keep in mind that general liability insurance may not be enough to give you real peace of mind. Consult with a professional insurance broker before you decide on a particular policy because every business is different and you do not want to be paying premiums for insurance policies that you don't really need while not being covered in the more important areas.
Professional Liability Insurance
General liability vs. professional liability insurance: Professional liability covers your legal expenses if you are found to have been negligent with your client. With this kind of insurance, the costs involved in defending the claim including legal fees are taken care of as well as any potential compensation and damages if you are found guilty.
No matter how long you have been in business or whether you consider yourself to be excellent at your job, not having professional liability insurance is a large risk because it could only take one disgruntled customer to destroy your business. There is no need to leave yourself open to such potential problems.
General liability vs. professional liability insurance: The scenarios covered by most professional indemnity policies include:
- Loss of goods of capital that were under your care
- Breach of contract
- Libel and Defamation
Professional liability is important in businesses such as engineering, accounting and law. Professionals who work on contracts will almost certainly need it as well before they are awarded the contract.
You may not necessarily need PL for your particular job, but are you willing to take the risk of having to pay thousands of dollars in litigation fees and fines? Every professional tries as hard as possible to provide the best quality service possible however human error does happen and any serious professional wouldn't leave something this vital to chance.
General liability vs. professional liability insurance: Not only you are at risk if you don't have PI insurance, but your client could also stand to lose due to a simple mistake. Ensure that you have PI cover not just to protect yourself, but your clients as well.
Professional Versus General Liability
The limits to your cover depend on what particular profession you are in. If you are hired by a large company for a project, then it is likely that your client will specify the minimum amount that your liability insurance policies must cover. In most cases this figure is based on what it would cost to recover their losses in the worst possible scenario. To ensure that they are protected fully from liability, businesses may want to consider purchasing general liability and professional liability insurance.
Read More Insurance Comparison Articles
Learn about the differences between certain types of commercial insurance to help you find the right policies for your company.
- Business Liability Insurance vs. Commercial Property Insurance
- Commercial Auto vs. Hired and Non-Owned Auto Insurance
- General Liability vs. Business Owners Policy
- General Liability vs. Errors & Omissions Insurance
- General Liability vs. Professional Liability Insurance
- General Liability vs. Workers Compensation Insurance
Business insurance can be confusing, especially when you are looking to get specific types liability insurance. The differences between general liability and professional liability are common misunderstandings. We have also found that many people confuse their contractual needs for general and auto liability.