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What is the difference between general liability and professional liability?

When it comes to insurance, there are many different types of coverage available to protect individuals and businesses from various risks and liabilities. Two common types of insurance that often get confused are general liability insurance and professional liability insurance. While they may sound similar, they actually serve different purposes and cover different areas of risk. In this blog post, we will explore the differences between general liability and professional liability insurance, as well as their similarities and benefits.

What is general liability insurance?

General liability insurance is a type of coverage that provides protection for businesses against claims of bodily injury, property damage, and personal injury. It is designed to cover the costs associated with legal defense, settlements, and judgments that may arise from these types of claims. General liability insurance is typically purchased by businesses to protect themselves from accidents or incidents that may occur on their premises or as a result of their operations.

What does general liability insurance pay for?

General liability insurance pays for a variety of expenses related to claims made against a business. This can include medical expenses for injuries sustained by third parties, repairs or replacement of damaged property, legal fees, and settlements or judgments awarded to the injured party. It can also cover advertising injuries, such as defamation or copyright infringement, and certain types of personal injuries, such as false arrest or invasion of privacy.

What is professional liability insurance?

Professional liability insurance, also known as errors and omissions insurance, is a type of coverage that provides protection for professionals against claims of negligence, errors, or omissions in the performance of their professional duties. It is designed to cover the costs associated with legal defense, settlements, and judgments that may arise from these types of claims. Professional liability insurance is typically purchased by individuals or businesses that provide professional services, such as doctors, lawyers, architects, consultants, and contractors.

How are general liability and professional liability insurance similar?

While general liability and professional liability insurance cover different areas of risk, they do share some similarities. Both types of insurance provide protection against claims that may result in financial loss for the insured party. They also both cover the costs associated with legal defense, settlements, and judgments. Additionally, both types of insurance typically have a deductible, which is the amount the insured party must pay out of pocket before the insurance coverage kicks in.

However, there are also some key differences between general liability and professional liability insurance. General liability insurance is broader in scope and covers a wider range of risks, such as accidents, injuries, and property damage. It is typically purchased by businesses to protect themselves from claims that may arise from their operations. On the other hand, professional liability insurance is more specific and covers claims related to professional negligence, errors, or omissions. It is typically purchased by individuals or businesses that provide professional services.

Another difference between the two types of insurance is the cost. General liability insurance is generally more affordable than professional liability insurance, as it covers a broader range of risks and is considered to be less specialized. The cost of professional liability insurance can vary depending on the type of profession, the level of risk involved, and the amount of coverage needed.

In conclusion, general liability insurance and professional liability insurance are two different types of coverage that serve different purposes and cover different areas of risk. General liability insurance provides protection against claims of bodily injury, property damage, and personal injury, while professional liability insurance provides protection against claims of professional negligence, errors, or omissions. While they have some similarities, such as covering legal defense costs and having a deductible, they also have key differences in terms of scope, cost, and the types of risks they cover.

If you are in need of general liability or professional liability insurance, Shield Insurance Agency can help. Shield Insurance Agency represents over 40 insurance companies and can provide you with affordable and comprehensive coverage to protect you and your family. Contact Shield Insurance Agency at (616) 896-4600 for a free quote today or start the quoting process by visiting this LINK and an agent will be in touch soon.