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. After all, there’s not just one type of liability insurance. The two more common types of liability insurance are: General Liability Insurance and Professional Liability Insurance.
And depending on what type of work you do and where you’re located, you may only need to get one of them.
So how do you know which one to get? And what are the differences between general liability vs. professional liability?
On the one hand, general liability insurance can usually financially protect you from claims involving third-party property damage and injuries (e.g., to customers), as well as accidents.
On the other hand, 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 say you’re refinishing cabinets in a customer’s kitchen. You take a step back to check out your work, but you accidentally knock over the customer’s laptop (which was placed on the kitchen island right behind you). 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 customer 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).
Say 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 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.
Want to learn more about which coverage might be best for your business? We can help with that. As one of the leading online insurance platforms, we make it our business to protect your business. Just answer a few easy questions and get free insurance quotes from some of the nation’s most trusted insurers.
Once you see the one you like, you can select it and buy it right online, with many insurers offering immediate proof of coverage.
And if you get stuck at any point, one of our U.S.-based insurance agents can help. Give us a call at 844-654-7272 and we’ll be happy to chat with you!
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 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
If you’re not sure if you need both, just give one of our insurance experts a call and we can help answer questions you may have.
Ultimately, the choice is yours — you can choose to get general liability insurance, professional liability insurance, or both.
But 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 that can deliver a great deal of peace of mind!
Getting business insurance is a smart choice for business owners who want to protect themselves from big risks. And combining general liability insurance with professional liability insurance is a great way to give your business a solid foundation of protection.
Want even more good news? You can find affordable GL + PL policies right here.
More protection for a lot less money. That’s the Simply Business way!
I love writing about the small business experience because I happen to be a small business owner - I've had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!
Mariah writes on a number of topics such as small business planning, contractor insurance, and business licenses.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.