If you run a small business, you’ve likely heard about both general liability and professional liability coverage. But what’s the actual difference? Do you need one or both?
Understanding professional liability insurance vs general liability insurance is essential for protecting your revenue, reputation, and long-term growth. These policies cover very different risks, and choosing the wrong one can leave serious gaps in protection.
What General Liability Insurance Covers
General liability insurance protects your business against third-party claims involving:
- Bodily injury
- Property damage
- Advertising injury (libel, slander, copyright claims)
- Legal defense costs ties to these claims
According to the U.S. Small Business Administration, general liability insurance helps protect businesses from third-party claims involving bodily injury and property damage1.
What Professional Liability Insurance Covers
Professional liability insurance (sometimes called Errors & Omissions insurance) protects against claims that your services cause financial harm. It covers:
- Negligence
- Errors or mistakes
- Missed deadlines
- Inaccurate advice
- Failure to deliver promised services
Unlike general liability, this policy addresses intangible losses; financial damage instead of physical injury.
The Key Differences Between the Two
When comparing professional liability insurance vs general liability, the biggest differences come down to the type of risk covered.
| General Liability | Professional Liability |
| Covers physical injuries & property damage | Covers financial losses from services |
| Handles slip-and-fall claims | Handles negligence claims |
| Required by many landlords & vendors | Required by many service contracts |
| Protects against advertising injury | Protects against errors & omissions |
In short:
- General liability protects what happens physically.
- Professional liability protects what happens professionally.
Many growing businesses carry both policies to avoid coverage gaps.
Which Type of Coverage Does Your Business Need
The right answer depends on how your business operates.
You will likely need general liability insurance if you:
- Meet clients in person
- Own or lease commercial space
- Work at client locations
- Sell physical products
You likely will need professional liability insurance if you:
- Offer advice or consulting
- Provide design, marketing, IT, financial, or healthcare services
- Sign contracts guaranteeing performance
- Could be accused of negligence
Most small businesses need a broader strategy that includes both policies under a smart small business insurance plan. Skipping one may save money upfront, but it can cost significantly more in the event of a claim.
How Gild Insurance Helps You Chose the Right Protection
At Gild Insurance Agency, we don’t believe in one-size-fits-all policies. We help business owners:
- Identify real exposure risks
- Avoid overlapping coverage
- Close dangerous protection gaps
- Align insurance with contracts and growth goals
Whether you’re comparing professional liability insurance vs. general liability for the first time or reviewing your current coverage, our team helps you choose the protection that first your business.
Ready to protect your business? Get a quote online or schedule a call with a Gild agent today.
Frequently Asked Questions
What is the difference between professional liability and general liability?
The difference between professional liability insurance vs general liability comes down to the type of harm covered.
- General liability insurance covers physical risks like bodily injury, property damage, and advertising injury.
- Professional liability insurance covers financial harm caused by mistakes, negligence, or failure to deliver professional services.
General liability protects against accidents. Professional liability protects against errors.
Do I need both professional and general liability insurance?
Many small businesses need both policies.
General liability insurance protects against physical risks like injuries and property damage, especially if you meet clients, lease space, or sell products. Professional liability insurance protects against claims tied to mistakes or negligence in your services.
Carrying both helps prevent coverage gaps and strengthens your overall protection strategy.
What is not covered by professional liability insurance?
Professional liability insurance typically does not cover:
- Bodily injury or property damage
- Employee injuries (workers’ compensation handles this)
- Intentional wrongdoing or fraud
- Criminal acts
- General business risks unrelated to professional services
It focuses strictly on claims involving negligence, errors, missed deadlines, or failure to perform professional duties.
Is professional liability included in GL?
No. Professional liability insurance is not included in a general liability policy.
General liability covers physical incidents. It does not cover financial losses caused by professional mistakes. If a client sues you for negligent advice or improper service delivery, only professional liability insurance would respond.
- https://www.sba.gov/business-guide/launch-your-business/get-business-insurance ↩︎
