There are some differences between general vs professional liability insurance that might help clarify what policy insurance or policies you should consider for your business.
Professional and General Liability Cover Different Exposures
General liability can cover your business for a wide range of claims including bodily injury, personal injury (as a result of libel, slander, etc.), property damage, legal expenses, product liability, and even manufacturing-related injuries.
Whether it be a customer, visitor, vendor, or other third-party, if a physical injury occurs on or with your business’ property, you could face a lawsuit that general liability insurance would protect.
Professional liability insurance, on the other hand, offers protection for professionals who provide bad advice, act in bad faith, infringe on copyrights, or misrepresent themselves or their services. If someone experiences a financial loss because of a service-provider’s errors and omissions, they can sue said service provider — which is why you should consider professional liability insurance if you provide services to customers or clients. Still, there’s more to understand for general vs professional liability. Read on.
Claims-Made Coverage Contingencies
General liability insurance is a “claims-made” policy, which means if you have the insurance when the claim is filed, you will be covered, regardless of when the alleged event occurred.
Professional liability insurance is also a claims-made policy but has a retroactive date exception. This means if the event that led to the claim occurred before the retroactive date of your policy, the current insurance policy won’t cover the claim. This is why it’s important for service providers to remain vigilant when their policy coverage could lapse and should be renewed. If gaps in coverage do exist, businesses should look into prior acts coverage as well.
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