Most business owners have a tough time understanding the difference between General Liability sometimes known as Business Liability or CGL and Professional Liability which is also known as Errors & Omissions (E&O) or Malpractice Insurance.
In this article, we will simplify both for you to try and make it a little easier to understand.
General Liability
General liability insurance is also known as Commercial General Liability (CGL) Insurance and is the basic liability coverage that is going to help protect your business. Protecting you against lawsuits resulting from bodily injury or any property damage that’s caused at your business on your premises or even that you caused to somebody while conducting business elsewhere.
This is sometimes referred to as slip, trip, and fall coverage.
Other coverages that are built into the general liability coverage includes advertising liability like libel or slander, misrepresentation, and copyright infringements.
This coverage is either purchased on a standalone basis or packaged on a Business Owner’s Policy (BOP)
The difference between the two is that a Business Owner’s Policy also includes coverage for property owned by the business along with additional coverage’s like Loss of Business income or Employee Theft.
Professional Liability Coverage
Professional Liability Coverage or E&O insurance is a type of liability coverage designed to protect professionals against liability incurred as a result of an error and omission in performing their professional services.
Traditional professions who are required or should have this coverage include
- Accountants
- Attorney’s
- Insurance agents
- Real Estates agents
- Architects and engineers
- Medical practices
Professional liability will protect economic or financial losses suffered by third parties. Except for a few exceptions (like medical practices) where it also covers bodily injury.
This policy is written on a claims-made basis. So the policy that covers the claim is the one that is active when the claim was filed, not when the incident happened.
Understand Insurance Coverage
Trying to understand insurance coverage is one of the last things a business owner wants to be handling.
It is important that as a business owner you build a relationship with an insurance agent who is going to help you understand the insurance that your business needs.
If you don’t have a relationship with an agent or want a review of your insurance then click the button below to schedule a review with one of our trusted insurance advisors.
