When starting a business, you'll hear that you need "liability insurance." But which kind? The two most common policies—General Liability (GL) and Professional Liability (PL)—cover very different risks. Understanding the difference is key to closing coverage gaps.
General Liability (GL): Physical Risks
Think of General Liability as "slip-and-fall" insurance. It covers third-party physical injuries and property damage.
- Who needs it? Almost every business, especially those with a physical location or those who visit client sites (contractors, retail stores, restaurants).
- Scenario: A customer trips over a loose rug in your shop and breaks their arm. GL pays their medical bills.
- Scenario: You are painting a client's house and accidentally knock over an expensive vase. GL pays to replace the vase.
Professional Liability (PL): Abstract Risks
Also known as Errors and Omissions (E&O) insurance, this covers financial losses caused by your professional advice or services. It protects you against claims of negligence, mistakes, or failure to deliver.
- Who needs it? Consultants, accountants, real estate agents, architects, and anyone who provides professional advice.
- Scenario: A web developer launches a site late, causing the client to miss a major holiday sale. The client sues for lost revenue. PL covers the legal defense and settlement.
- Scenario: An accountant makes a math error on a tax return, costing the client a penalty. PL covers the damages.
The Business Owner's Policy (BOP)
For many small businesses, the best option is a Business Owner's Policy (BOP). This bundles General Liability with Commercial Property insurance (protecting your equipment and inventory) into one affordable package. It's often cheaper than buying the policies separately.
Protect your hard work. Get a business insurance quote today.