If you are a small business owner, you know you likely need insurance to protect yourself and your assets. But, do you know the difference between general liability insurance and professional liability insurance? How do you know which policy covers different risks? Here are a few pointers to help you understand which small business insurance policy you will need.

What Is General Liability Insurance?

General liability insurance covers general lawsuits that your business could face. It will kick in if a third party sues your business over instances such as:

1. Bodily injuries suffered on your property

2. Damage caused by you, your employees or your property on your property

3. Mis-advertising such as slander, libel, misappropriation and/or copyright infringement

Your legal expenses will be covered by general liability insurance in the case of a lawsuit stemming from these situations. No matter what industry – or size – of your business, general liability insurance is considered a fundamental to business protection. Always remember that these claims could arise at any time, so having the right business insurance is key.

What Is Professional Liability Insurance? 

This type of insurance is vital for service providing businesses, as it is commonly referred to as “errors and omissions insurance” or “malpractice insurance”. Professional liability insurance focuses on lawsuits brought on by professional services such as cleaning, medical care, construction, etc.

Professional liability insurance will protect you in case you experience a third-party lawsuit allegation, such as: 

  • You provided negligent professional services
  • You failed to fulfil contractual obligations
  • You provided incomplete or inadequate services
  • You made mistakes or omissions

These lawsuits can cost business owners a lot of money, even if you aren’t at fault. If a customer is unhappy and decides to sue, having professional liability insurance will cover you for legal expenses and losses incurred. Whether or not the claim holds any truth won’t matter as long as you have sufficient professional liability insurance.

You might be wondering if you need professional liability insurance for your small business, so asking your local insurance agent is a good idea. Our expert insurance agents can review your business and your assets and make suggestions for your insurance.


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Do General Liability and Professional Liability Ever Cover the Same Claims?

The short answer is no. Each policy type covers certain liabilities, but not the sameliabilities. Here are a few ways these two types of insurance coverages are alike:

Both policies deal with unavoidable liabilities. Unfortunately, as a small business owner, you might have a target on your back. Your General Liability and Professional Liability policies can work together to mitigate your expenses if you end up in legal trouble over any accident or mishap. 

If you enter into a contract with a client, you may be required to carry general liability (and in many cases, workers’ compensation insurance). Larger contracts, in any industry, may require you to carry professional liability insurance as well, just in case a potential lawsuit arises.

Key Differences in General Liability and Professional Liability Insurance:


General liability insurance spares your business from lawsuits over say, a customer slip and fall on your property. Whereas professional liability insurance protects you from costs associated with alleged professional mistakes, such as a professional cleaner ruining a countertop.

So which policy is right for your business?

You may need both types of policies to cover your business adequately and avoid costly unexpected lawsuits. Especially if you are professional service or rent/own commercial property that is available to the public. It is possible, however, that you could skip both types of policies, but we don’t recommend this option. People and circumstances are unpredictable, so you never know when an accident could happen, or a client is unsatisfied and wants to argue a contract.

Choosing the right business insurance policy is easier when you have a local insurance agent to review all of your options. We spend time getting to know your business operation, and your individual preferences and lifestyle, to make the best suggestions and get you the right coverage.