When you’re running a business, protecting it from risk is non-negotiable. But the type of coverage you need depends heavily on what your business does—and how it interacts with customers, clients, or patients.
Two of the most commonly confused types of commercial insurance are general liability and professional liability. Let’s break them down so you can make a more informed decision.
What Is General Liability Insurance?
General liability insurance protects your business against claims of bodily injury or property damage caused by your operations. It’s the coverage most businesses start with and is often included in a Business Owner’s Policy (BOP).
Examples of general liability claims:
- A customer slips and falls in your office or store
- A contractor accidentally damages a client’s home
- A sign falls off your business and injures a passerby
Chris Mitchell, founder of Mitchell Insurance Group, puts it simply:
“General liability protects your business from the physical world. It’s for the accidents people think of first—slips, falls, and property damage. But it doesn’t cover professional advice or service errors.”
What Is Professional Liability Insurance?
Professional liability insurance (also called errors and omissions, or E&O) covers risks tied to your professional services, advice, or expertise. If your work results in a financial loss—or worse—for a client, this coverage steps in.
Examples of professional liability claims:
- An accountant makes a tax error that results in fines for the client
- A consultant gives incorrect advice that causes a business loss
- A doctor prescribes a medication that causes a serious reaction due to overlooked information
If you’re in a field that relies on your knowledge—think healthcare, legal, design, insurance, or finance—this coverage is crucial.
Do You Need Both?
In many cases, yes. Both types protect different sides of your business. Here’s a quick breakdown:
| Coverage Type | Covers | Doesn’t Cover |
| General Liability | Bodily injury, property damage, legal fees | Professional services or advice |
| Professional Liability | Service errors, bad advice, negligence, omissions | Physical injuries or damage |
Most business owners don’t realize that general liability doesn’t protect against professional mistakes—and vice versa. You can be exposed if you only have one.
For an easy-to-follow external comparison of general liability vs. professional liability, check out this helpful breakdown from Forbes Advisor. It reinforces how each policy protects against different types of business risks.
What It’s Not: Umbrella Policies
Some assume professional liability is similar to umbrella coverage. It’s not.
- Umbrella coverage increases the limit of existing general liability (and sometimes auto) coverage.
- Professional liability is its own standalone protection and must be added separately in most cases.
Real-World Examples
Here’s a simple comparison that Chris Mitchell shared:
“If a patient walks into a doctor’s office and the chair breaks underneath them, that’s a general liability issue. But once they walk into the exam room and the doctor gives a misdiagnosis—that’s professional liability.”
Similarly, if you’re an insurance agent and promise a client a policy covers something it doesn’t, that’s a professional error, not a physical one—and general liability won’t help.
Related Reading From Mitchell Insurance Group
Continue exploring commercial insurance topics in our recent blog posts:
- Update Your Business Insurance: What Colorado Owners Should Know
- Colorado Commercial Insurance Guide for Small Businesses
Frequently Asked Questions
Q: What’s the difference between general and professional liability?
General liability protects against physical harm or damage, while professional liability protects against mistakes in your work, advice, or service.
Q: Can I just get general liability if I’m a consultant or advisor?
No. If you give advice or make decisions that could financially impact a client, you need professional liability.
Q: Is professional liability included in a Business Owner’s Policy (BOP)?
Only minimally, if at all. It typically needs to be added as a separate endorsement.
Q: Is this the same as an umbrella policy?
No. Umbrella policies extend coverage limits. Professional liability is a completely different type of coverage.
Q: How do I know if I’m covered properly?
The best way to know is to have a conversation with a licensed advisor. We’ll review your business structure and make personalized recommendations.
Ready to Review Your Coverage?
Whether you’re just starting your business or growing into new services, we’ll help ensure your insurance protects what you’ve worked hard to build.
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