General Liability vs. Professional Liability
If you’ve thought about starting your own business, you’ve probably heard that you need to get insurance. But, do you need general or professional liability coverage? Or Both? What risks do these kinds of insurance protect against, and why are they so important? Here’s a quick breakdown:
- General liability insurance protects the general assets of your company in the event of injury to one of your customers, and/or damage to their property.
- Professional liability insurance covers the cost of legal settlements you are responsible to pay, and the legal fees incurred to defend yourself against a claim.
Like all of our insurance products, our liability policies can be designed to fit the needs of your business, no matter what the size.
Why Does My Business Need General Liability Insurance?
It’s important to reduce the risk of liability as much as possible, so the first step in protecting yourself and your business is to manage potential risks to customers and third parties. Your business is accountable for the effect of its actions on the public, so if you own a café, hair salon, or clothing retailer, you have a legal responsibility to the people that visit your premises. Similarly, if you are an electrician and your work requires you to visit a customer’s property, you have a legal responsibility to both the customer as well as the general public.
Why Does My Business Need Professional Liability Insurance?
Did you know that an inadvertent action can still be considered negligent? The law refers to these as “Unintentional Torts”- where an unplanned act leads to injury, property damage, or financial loss. These torts are considered negligent because they typically occur when one party fails to exercise a reasonable degree of caution. Even if it’s not intentional and without malice, like an error in meeting professional standards, it can be considered negligent. Unfortunately, even a customer’s misconceptions can lead to baseless lawsuits that require a defense.
4 Examples of Unintentional Tort Claims:
- Product liability claims.
- Medical malpractice.
- Accidents at the gym.
- Private host liability.
How Do I Know If My Business Is At Risk?
Think about it this way – anyone who provides a professional service to others is at risk. That includes lawyers, yoga instructors, doctors, hair stylists, realtors, trapeze artists, and more.
No matter the profession, the proper General and/or Professional Liability Insurance policy typically includes the following coverage:
- Negligence: Including alleged mistakes in professional services.
- Legal Costs: Providing for defense regardless of fault.
- Past work: For future, current, and past work completed, but only for a specified period of time.
No two businesses are alike, and each will have differing insurance needs. You’ve worked hard to build the business of your dreams. Make sure you protect it with our General and Professional Liability Insurance products.