General Liability vs. Professional Liability
It might be difficult to determine what types of liability insurance you require as a company owner. The appropriate insurance depends on the sorts of risks your business faces.
Liability risks are common for big and small companies, but the form of liability is dependent on what you do. A contractor, for example, might be held liable if something they’ve created causes harm to someone else; a consulting firm, on the other hand, might be responsible for a client’s financial losses if they made an error in their advice.
A lawsuit may result from either of these sorts of obligations. That’s where general liability insurance and professional liability insurance come into play.
How General Liability Differs From Professional Liability
The most significant distinction between general and professional liability is the kinds of risks they cover. General liability covers bodily injuries and property damage in addition to physical dangers. Professional liability, on the other hand, protects you against more abstract hazards such as mistakes and omissions in the services your firm provides.
General Liability Insurance Definition and Risks Covered
Personal injury claims, such as workers being injured on the job. This does not include your employees’ injuries, however. Your workers’ compensation insurance might cover their work-related injuries or illnesses.
Bodily injury claims: If someone is hurt on your business’s property, you’ll be responsible for their medical bills.
Property damage : your business or employee’s cause.
Reputational harm : If someone sues you for malicious prosecution, defamation, slander, wrongful eviction, privacy breaches and other similar claims that result in reputational damage.
Advertising errors :If you’re sued for copyright infringement in your ad, you may be held liable if it contains advertising errors.
Who Should Take Out General Liability Insurance?
Most small company owners should have general liability insurance because it can help them protect themselves against problems that often occur in their business. We’ve included this coverage as a standard component of our Business Owner’s Policy (BOP).
How Much Does General Liability Insurance Cost?
Your general liability insurance cost typically depends on many factors, including your:
The type of business you run might impact your rates and coverage, it’s important to know what kind of company you’re buying a policy from before purchasing one. For example, if you own a construction firm in an industry with higher risks or pay more for insurance,
- Years of experience, because companies that have been around longer generally pay a lower rate than firms who have just arrived, you may expect to save money.
- Location: If you live in an area where natural disasters are more likely, for example, storms or floods, it makes sense to choose a site that is closer to your home.
Liability Insurance Definition and Risks Covered
Professional liability insurance, sometimes known as errors and omissions insurance, protects your company if your client files a claim against you for financial damages resulting from the professional service that you supply.
Professional liability insurance can help cover the costs of a company’s legal defense:
- If a bookkeeper They make a technical mistake that costs their client thousands of dollars.
- If a web developer A mistake made on a client’s e-commerce site, which ultimately results in missed sales opportunities.
- If an accountant A tax preparation firm will be fined if it files an incorrect tax return on behalf of a customer, which leads to a penalty fee.
Who Should Take Out Professional Liability Insurance?
Professional liability insurance is usually required by some states. Healthcare professionals, for example, require medical malpractice insurance, which is a form of professional liability.
When you sign a contract with your customers, you may be required to have professional liability coverage. Even if it is not required by law, professional liability insurance is crucial, especially if you work with clients or consumers.
Some examples of businesses that should carry professional liability insurance include:
- Lawyers or law firms
- Consultants or professionals
- Accountants or tax preparers
- Home inspectors
- Technology professionals
How Much Does Professional Liability Insurance Cost?
There are numerous errors that businesses may make. That’s why the price of professional liability insurance varies from one firm to the next. Some general aspects that might influence your professional liability premium include:
- Type of business
- Policy coverage limits
- Number of employees
- Years in business
- Claims history
Get a Get a quotation for professional liability insurance by finding out how much a policy might cost you and how it may protect your company. You can also call American Financial Solutions LLC at 866-737-1727 to speak with one of our professionals, who will be able to answer your queries and assist you in obtaining the right coverage.