General Liability vs. Professional Liability: What’s the Difference?

At first glance, getting liability insurance seems pretty straightforward: just find a policy, buy it, and feel comfortable being insured.

If only it were that simple. Take it from Tom Kates, small business owner of Tom Kates Photography: ¹

“It’s been hard to describe to insurance companies the kinds of coverages I need beyond typical liability and equipment coverage. Things like coverage to cover the costs of a re-shoot of a job should there be some file loss or other catastrophic issue.”

Liability insurance seems straightforward until you factor in all the little risks that come with your job. Plus, there isn’t just one type of liability insurance. Two common types of liability insurance are general liability (GL) and professional liability (PL) insurance, and whether they’re the right fit for your business will depend on what you do.

So how do you know which one to get? And what is the difference between general liability and professional liability insurance?

Comparing General Liability Insurance vs. Professional Liability Insurance

The main difference between general liability and professional liability insurance comes down to the risks they typically cover.

General liability insurance generally offers financial protection from claims involving third-party property damage and injuries (e.g., to customers), as well as accidents.

Professional liability insurance can often cover claims involving unintentional negligence or mistakes that you or an employee may have made while performing your work.

Let’s take a look at a couple of examples of GL insurance and PL insurance in action:

General liability insurance

You’re a consultant working with a client on an IT project. As you’re handing the client their laptop, you accidentally drop it. The laptop’s screen breaks, rendering it useless.

Fortunately, your GL policy could help financially cover the costs to repair the screen or replace the laptop altogether. And if your client sues you for the damages, your policy could cover the costs of hiring an attorney to defend you against the lawsuit (up to your policy limit).

Or imagine you’re a photographer doing a portrait session at your studio. Your customer trips over a lighting cable and twists their ankle. General liability insurance will typically provide financial protection to cover medical bills, and potential legal fees.

Professional liability insurance

You’re preparing your client’s taxes and misplace a decimal point. Your client ends up getting audited by the IRS and, as a result, sues you for alleged negligence.

In this scenario, your PL policy could cover the costs to hire a lawyer to defend you. Additionally, your policy could pay out any claims related to the lawsuit (as always, up to your policy limit).

Bottom line: general liability and professional liability insurance policies help cover different types of liability you could face in your industry.

So if you typically work on client properties or have a physical storefront, general liability insurance may make the most sense for you.

If, however, you’re in the business of advising clients or providing them with financial services, professional liability insurance may be a good option to safeguard against the “catastrophic issues” Tom alluded to.

Want to learn more about which coverage might be best for your business? We can help with that. As a leading online broker for small business insurance, we make it our business to protect yours. 
Just answer a few easy questions and get free insurance quotes from some of the nation’s most trusted insurers. You’ll be able to browse coverage options, compare quotes, and select the policy for you — all in one place.nsurance agents can help. Give us a call at 844-654-7272 and we’ll be happy to chat with you!

General Liability vs. Professional Liability Insurance FAQs

Do I need general liability and professional liability insurance?

Depending on the type of work you do, you may need to get both types of coverage to provide your business with the most protection.

Here are a few signs you may need both general liability and professional liability insurance:

• You work in an advisory business that has a physical location (like an office or a storefront)
• Your industry and/or location require you to have both types of insurance coverage
• You want to have that extra layer of protection

What should I look for in general liability and professional liability insurance?

• Coverage. No matter which type of policy you choose, make sure it covers you adequately for the biggest risks in your industry. For example, if you’re an e-commerce seller, it may make sense to find a GL policy that offers more protection against product liability claims.
• Reputation. You should work with an insurer who not only understands your type of business, but also has a reputation for fast claim payouts and five-star customer service.
• Affordability. Business insurance doesn’t have to break the bank. Fortunately, we’ve made it easy to pick and choose among comprehensive policies that won’t max out your budget.
• Choice. Your insurer should make it easy for you to select the policy that makes the most sense for your business (and budget) needs. At Simply Business, we make it easy to compare policy options from top insurance companies, so you know exactly what you’re getting right from the start.

Interested in seeing if general liability and professional liability insurance are right for your business? Our quote comparison tool is a quick, simple way to figure out what coverage is recommended for the type of work you do. 

Why would you want professional liability in addition to general liability?

Ultimately, the choice is yours — you can choose to get general liability insurance, professional liability insurance, or both.

PL and GL are both great policies to help you protect your business against a wide range of risks and are two of our most commonly recommended coverage types. In many cases, it may be a good idea to get both types of policies.

That’s because general liability and professional liability protect your business financially from different risks. General liability tends to protect you from more physical risks (like property damage and accidents), while professional liability can protect your business from more intangible risks, like negligence or making a mistake.

By having both policies, you can provide your business with a more comprehensive layer of protection — and greater peace of mind.

A Perfectly Protective Partnership

Here’s what makes being insured worth it for photographer Tom Kates:

“Feeling as though my livelihood as well as my home and family are protected are obvious benefits. Beyond that, I regularly am asked (and often required) to provide a certificate of insurance to even begin a job.  Without my significant coverage, I would likely not be able to work on many of the projects I am awarded.”

Getting business insurance is a smart choice for small business owners who want to protect themselves from big risks, land more gigs, and give themselves peace of mind. And combining general liability and professional liability insurance is a great way to give your business a solid foundation of protection.

1. http://www.tomkatesphotography.com/ ↩︎