General vs Professional Liability insurance: what’s the difference?

Nobody needs to tell you: Operating any type of business involves risk. There’s just no way to completely eliminate it. Fortunately, there is small business insurance that can protect you from the financial impact of those risks. Two of the many types of coverage available are professional liability insurance (also called errors and omissions or E&O insurance) and general liability insurance. But when it comes to general vs professional liability insurance, it can be difficult to know which type of coverage you need.

Getting the scoop from biBerk on what these policies cover, and the difference between general and professional liability insurance, can help you understand their value and whether you need them.

This article addresses the important topic of general liability insurance vs professional liability insurance. Let’s go!

Who needs to understand Professional vs General Liability insurance?

It’s important for all business professionals to have a basic understanding of general liability vs professional liability insurance. Why? Well, these two policies cover many types of business risk, but their coverage doesn’t overlap. So, understanding the specific types of incidents covered by general liability and E&O insurance helps you decide if you need one, the other, or both. 

If you’re a new business owner, figuring out professional vs general liability insurance and the risks they cover is essential for a couple of reasons. For one thing, you’re probably trying to manage your costs carefully as you get your company up and running. If you don’t need professional liability insurance, for example, you definitely don’t want to be paying for it—even though coverage is very affordable. 

That said, you don’t want to have any dangerous coverage gaps. biBerk’s a great partner for new business owners, since we can guide you on the policies you need, provide risk management tips, and tailor your insurance coverage to your company’s specific needs. We’re also your source for all kinds of helpful resources, including a glossary of common business terms. 

It’s crucial for freelancers to have a good grasp of what’s covered by general liability and E&O insurance, as well. It’s likely that you offer professional advice or services, and if you do, you need E&O to protect your business. Let’s say you’re an IT consultant and you advise a client to buy and install expensive computer hardware. They do, but then you realize you specified the wrong equipment. The client gets hit with costs related to disconnecting and returning the equipment and sues you. Your E&O policy can protect you. 

If you own a growing professional services company, you’ll also want to know what general liability and professional liability insurance can do for you. As an expanding company, you probably need general liability insurance. And because you provide professional services, E&O insurance is a must. If you ever have to file a claim, you’ll find our process is efficient, fair, and geared toward keeping incidents from disrupting your company’s forward momentum.

What does Professional Liability insurance cost?

If you’re like most business owners and decision-makers, you want to keep your expenses down. Professional liability insurance policies from biBerk are very affordable, starting at around $300. Your exact professional liability insurance cost is calculated based on multiple factors, including your industry, the level of coverage you choose, how long you’ve been in business, how many employees you have, your annual revenue, and the policy limits you need, so it could be in the thousands annually. But your cost will be appropriate for your company’s characteristics and a great value for the protection your policy provides. 

That’s partly because, with biBerk, you don’t pay broker fees and other unnecessary fees. Consequently, you can save up to 20%. It's cost-effective coverage that protects your small business from financial harm.

What is General Liability insurance?

General liability insurance can protect your business from unforeseen claims for things like damage to customer property, bodily injury to non-employees, product liability, libel, slander, and copyright infringement.

When would general liability insurance come into play? A common example of its financial protection is a slip-and-fall accident at your place of business. Someone other than an employee—a customer, delivery person, etc.—takes a spill while at your office, breaks their arm, and sues you for the cost of their medical bills. Having the right coverage means you probably won’t have to deal with a large out-of-pocket expense related to the incident.

What does General Liability insurance cost?

General liability premiums start at $275, with most of our customers paying less than $1,000. And here again, we sell our small business insurance policies directly to you, which means there’s no markup to cover fees from middlemen or brokers. Consequently, your savings over other providers can be substantial.

What’s the difference between General and Professional Liability insurance?

Both types of policies offer important protection, but general and professional liability insurance are designed to address different risks.

Professional liability protects your business from the financial impact of third-party claims for abstract risks like mistakes you are accused of making during the course of providing professional services. General liability mainly covers the cost of physical incidents—damage and injuries. That’s a key difference when considering general liability vs E&O insurance (another name for professional liability insurance).

Do I need both General Liability and Professional Liability insurance?

Now that we’ve explained general vs professional liability insurance, you can make well-informed decisions about your financial protection. If your business provides professional advice or services, you probably need both small business professional liability insurance and general liability insurance (and possibly other policies like commercial auto). If you’re not in that type of business, you may not need professional liability, but getting general liability insurance is likely still a good idea.