General Liability vs Professional Liability
Insuring your business can be like shopping at a hardware store for the first time. You’re not exactly sure what you need and you have no idea where to find it. You walk through countless isles and just can’t seem to find what you are looking for. Finally, you come across someone who works there, knows what you need, and guides you there.
Think of your insurance agent as the person who offers to help you in this hypothetical. They ask you specific questions and make sure they leave you with the best product for your situation. Like shopping in an unfamiliar place, it is helpful to have an insurance agent provide you with the proper insurance for your business.
Commercial insurance is similar to personal insurance but is far more complex. There are many different types of policies – each protecting a different aspect of your business.
We’ve touched on a few of these policies previously, but let’s take a more in-depth look at different types of liability policies for your business.
One of the most common commercial policies, and maybe the most important is a general liability policy. Everyone from a contractor to an accountant should have one.
A general liability policy provides protection if your business were to be deemed liable for most types of damage or injuries. Often times this can be included in a packaged policy with property coverage for small businesses, called a business owner’s policy (BOP). General Liability coverage covers payment for damages and injuries as well as legal expenses.
The important thing to note that having a general liability policy does not cover you entirely. General liability covers mainly physical types of damage and injury as well as any lawsuits that would arise out of those situations.
However, in order to protect yourself from lawsuits arising out of negligence in your work, you need a different liability policy.
Professional liability policies primarily cover monetary losses caused due to a business’s negligence. You may have heard of a policy called Errors and Omissions (E&O) which is another term for professional liability.
To illustrate what a professional liability policy covers, look at the name Errors and Omissions. Coverage kicks in if:
- An employee does something they should not have (Error)
- An employee did not do something they should have (Omission)
If another individual were to incur a financial loss and sue your business, your professional liability policy would provide coverage.
Where we come in
This is just the tip of the iceberg that is commercial insurance. Given the variety of commercial insurance policies available, it’s often unclear what your business truly needs. So, make sure you have an expert to guide you along the way.
Your local CRG agent takes the time to understand the entirety of your business and provides the proper protection for your specific situation. After all, your focus should be centered on running your business, not worrying about its protection.