Often people ask what the difference is between Professional Liability and General Liability insurance. It’s a question that’s worth exploring because any small business owner wants to know that they are getting the right insurance for the right risks that their business faces. The important thing to remember is that the landscape of risk for small businesses is large and varied, and the costs for those risks can be large.
Some of those risks are to your business, property, any employees you have, as well as anyone who comes into contact with your business and employees. Those are the risks covered by your General Liability insurance policy. On the other hand, Professional Liability insurance — also known as Errors and Omissions (E&O) insurance — is designed to cover risks specific to the profession or situation.
What general liability covers
A general liability policy insures you against claims of property damage or personal injury, sustained by a third party (in other words, someone outside of your business). General liability insurance covers legal fees, settlements, and property damage. For example, someone visits your store, slips and falls on the floor. They injure themselves during the accident and then sue you for damages. Your business general liability policy could cover the damages.
What professional liability covers
Professional liability insurance, or E&O insurance, is designed to cover negligence related to the professional services given. Generally speaking, it’s a claim involving financial damages, rather than a claim of physical injury.
Professional Liability insurance applies to professions where a certain standard of service is expected. For example, an accountant who makes a mistake filing a client’s taxes results in a financial loss for their client. If the client sued the accountant, the accountant could use their professional liability insurance to cover any settlement.
A general liability or professional liability claim could be devastating for a small business, which is why you always need to have the right insurance policies in place. Keep in mind that the allegations do not have to be true to be financially damaging. Having insurance also gives you access to professionals who can advise you on the next steps.
Do small businesses need both professional and general liability insurance?
Even though professional and general liability insurance are two separate policies, they’re often packaged together. That doesn’t mean you need to purchase both. It really comes down to the type of busines you operate.
Let’s say you own a restaurant, having general liability insurance would be a must, but you likely wouldn’t need professional liability insurance. That said, restaurant owners would want other types of insurance such as content insurance.
Then there are writers or PR people who work from home. They might not think they need any insurance at all, but that’s a mistake. Anything you write that ends up in the public domain could be harmful. Someone could sue you which is why you should have professional liability insurance.
Although the cost of business insurance is reasonable, some business owners push off getting it since their cash flow may be tight. This may manage your money temporarily, but one claim against you could be devastating.
Everything you need to get a small business quote
Getting a small business insurance quote doesn’t have to be complicated. In the past the insurance quoting process was pain, hampered by outdated paper processes and unnecessarily back and forth. Thankfully, those days are over with modern providers that only ask what is absolutely necessary and are able to offer competitive quotes online
Before you apply, it’s worth knowing what to expect. The following is what will likely be asked when filling out a small business insurance application.
Your basic profile
This includes information such as your name, phone number, and address.
Your company’s profile
Your insurance application requires information about your business including the following:
- The legal name and address of your business
- What kind of business you have?
- What is your business’ projected annual revenue?
- What is the value of your equipment and business property?
- What kind of insurance you are seeking?
As you can see, you’re usually asked some basic questions so the algorithms can recommend you specific products. After your initial quote, it can be modified for your needs.
Where to get professional liability insurance?
The easiest way to purchase general and professional liability insurance is via an online broker such as Apollo. After filing out the online application, you’ll get an instant quote. You can purchase your insurance right away or get in touch with a broker for a customized quote.
It doesn’t matter if you’re an influencer, writer, or designer, you need to have liability insurance to protect you and your business.