General Liability vs. Professional Liability
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We all want to insure our businesses, but sometimes it can be tough to precisely determine what kind of insurance policy we need.
Two, in particular, manage to confuse many people: general liability and professional liability. How do these two differ, and which one should you get?
In this article, we’re going to talk about these two insurance plans so that you’ll know which one is better for your business.
General Liability vs. Professional Liability Insurance
There are certain risks that roughly all businesses face, and most of them fall under the liability category.
However, there are multiple kinds of liabilities – all of which cover specific aspects of business risks. In this section, we’re going to talk about the differences between general and professional liability.
What’s the Difference?
There are several differences between the two, mainly regarding clientele, coverage, and costs.
General Liability
General liability mainly provides coverage for all the ‘general dangers’ that you might face while running a business. This includes unsatisfied customers, reputational harm, and accidents that happen within your premises
Who Should Get It?
This specific type of liability caters to a very general sort of risk, the kind that almost everyone faces in the course of running a business. Thus, general liability is suited for all types of business owners.
However, some businesses are more at risk of these general risks than others simply because of exposure. These include businesses that:
- Sell products
- Serve food
- Entertain a large volume of customers
Coverage
This type of policy has roughly the same coverage for all contracts written. Mostly, general liability covers:
- Bodily injury
- Medical expenses
- Property damage
- Legal costs
- Reputational harm
General liability is usually tailor-made for your business, so you can add several types of liability to this policy as it’s being written up as well.
Cost
The cost of your general liability insurance policy will depend on the following factors:
- Business size
- Industry
- Location
Professional Liability
In contrast to general liability, professional liability is more specific. Specifically, it covers liabilities that your specific professional practice might have caused. This can include professional negligence, omission, and anything under that category.
Who Should Get It?
Professional liability is very much suited for business owners that use their profession to give advice or service to their customers directly. This includes:
- Consultants
- Medical professionals
- Lawyers
- Contractors, etc
Coverage
Professional liability coverage specifically covers errors that might happen in your business practice. This can include:
- Errors
- Negligence
- Advertising harms
- Omissions
Cost
Different professional services can make wildly different sorts of mistakes, so professional liability has to be written up exactly for the client’s specific risks. The factors that affect your premiums will include:
- Business type
- Industry
- The potential amount of damage you can do
- Business experience
- Location
General Liability vs. Professional Liability: Final Thoughts
Businesses need to be very careful about every aspect of their transactions to ensure they don’t encounter accidents or make mistakes.
However, disaster can strike when we least expect it, so the next best thing is to pick between general and professional liability.
If you need some help doing this, don’t forget to contact us today here at Magnum Insurance!
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