Is your insurance enough? Will your insurance protect you against all liability suits? Do you know what your insurance covers in the event of a lost court case? Many businesses purchase a commercial general liability (CGL) policy for protection against liability suits for general reasons. CGL policies can be customized to suit your business’ unique needs and will protect you against liability for common issues. For example, if a customer slips on your wet floor, you’re likely covered by CGL. However, it’s important to learn the difference between general and professional liability insurance and find out how errors and omissions coverage complements liability insurance. The safety and security of your business relies on having the right coverage for the wrong situation. Learn the difference between general and professional liability insurance now so that you don’t regret it later.

What is Professional Liability Insurance?

Professional liability insurance is a sub-class of liability insurance policies that are designed to protect professionals from costs that may arise from lawsuits alleging that the business has failed to properly render professional services. Professional liability insurance is also designed to protect against allegations of professional negligence. For example, medical practitioners will often purchase professional liability insurance to protect against malpractice suits or other allegations of negligence or misconduct. As a professional, you are expected to deliver a certain standard of care at all times. However, sometimes things, through no fault of your own, can go terribly wrong. Professional liability insurance is intended to protect professionals from these types of situations.

What is Errors and Omissions Insurance?

Errors and omissions insurance (E&O) is a type of professional liability insurance that protects companies and their employees against claims made by clients for inadequate services rendered or negligent actions. For example, a homeowner may allege that a contracting company (or one of its contractors) failed to do their work properly or within a reasonable amount of time. Or, a dentist may have a disgruntled client allege that improper care was taken in their treatment.

Whatever the case, E&O insurance is there to protect professionals from financial and emotional hardship that may arise in these types of cases. E&O insurance typically covers both courts costs and any settlements up to the amount specified by the insurance contract. If you lose in court, this type of insurance will compensate you for the damages awarded against you, as well as some additional costs associated with your defense. If you need to take time off work or are unable to work for whatever reason, professional liability insurance will help supplement your lost wages.

Why Would I need Extra Insurance on Top of Commercial General Liability Service?

While a CGL insurance policy will cover you against basic liability suits, such as if someone claims to become sick after eating at your restaurant, it does not cover against allegations of professional negligence or failing to render services. As its name suggests, commercial general liability services insurance is general. It does not cover all the specific needs of professionals working in specialized areas. A contractor is going to need a different kind of insurance than a doctor. Different fields of employment and specialization require different kinds of insurance.

What Type of Insurance Do I Need?

If you’re unsure what type of insurance is best for your company or profession’s needs, contact an insurance provider to guide you through your options. InsurEye is a great place to find professional advice and detailed information on the types of insurance available – you can quickly find out more about E&O, CGL and professional liability insurance. You can also request a quote and speak directly to an experienced insurance broker.

In Summary…

It’s important to learn the difference between general and professional liability insurance so that you and your employees are protected against liability suits or unfortunate legal and financial outcomes. E&O insurance is very common in many professions as well, as it allows professionals to protect themselves against an array of situations specific to their fields. While general insurance may cover the bulk of your insurance needs, it may not be specific enough to cover you in the event of allegations of professional negligibility, misconduct, or failure to render services.

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