General liability vs professional liability
Physical harm, or bad work. Two policies, and neither covers the other.
These two are confused more often than any other pair in commercial insurance, and the confusion is expensive because each one specifically excludes what the other is for.
The distinction is not about how serious the claim is or how much it costs. It is about what kind of harm occurred.
The line between them
General liability responds to physical harm: someone is injured, or someone's property is damaged, in connection with your operations. Professional liability responds to financial loss caused by your work, advice or professional judgement, where nothing was physically harmed at all.
| General liability | Professional liability | |
|---|---|---|
| What triggers it | Bodily injury or damage to someone's property | Financial loss from an error, omission or bad advice |
| Typical claim | A visitor is injured at your premises, or you damage a client's property while working | A design is wrong, a deadline is missed, or advice causes a client a loss |
| Who usually asks for it | Landlords, venues and general contractors | Clients contracting for professional services |
| Common name | GL, or public liability | Errors and omissions, E&O, or professional indemnity |
| How it is normally written | On an occurrence basis — the date of the incident governs | On a claims-made basis — the date the claim is made governs |
Worked through
A designer's client trips over a cable at a meeting and is injured. That is bodily injury: general liability.
The same designer delivers a specification with an error, the client builds to it, and the rebuild is expensive. Nobody was hurt and nothing of the client's was damaged — the loss is purely financial. That is professional liability, and a general liability policy will generally decline it.
Reversed, it works the same way. A professional liability policy is not written for the injured visitor, and will generally decline that claim too.
Occurrence and claims-made
This is the difference that causes the most trouble after a policy ends, and it is worth understanding before buying rather than after cancelling.
General liability is usually written on an occurrence basis: if the incident happened while the policy was in force, it generally responds even if the claim arrives years later, after that policy has expired.
Professional liability is usually written on a claims-made basis: what matters is that the policy is in force when the claim is made. Stop paying for it and cover for past work generally stops too, however long you held it.
Retroactive dates and tail cover
Two features follow from claims-made cover and both are easy to lose by accident.
The retroactive date is the point before which work is not covered at all. Switching insurer without carrying the original date forward can quietly cut off cover for everything you did before the switch, even with no gap in cover.
Tail cover, or extended reporting, allows claims to be made for a period after the policy ends. It is what you need when you retire, sell the business or change professions, and it is generally far cheaper to arrange at the point of cancellation than to discover you needed it.
Which one your business needs
Most businesses that need professional liability also need general liability. The reverse is not true, which is why so many businesses hold only the first.
The test is what you are actually being paid for. If a client's loss could arise from your judgement being wrong rather than from something being broken, general liability alone leaves that exposed.
- Consultants, designers, accountants, agencies and IT services — both, with professional liability usually the larger exposure
- Trades, retail, hospitality and anything with premises the public enters — general liability first
- Contractors doing design as well as build — both, and worth confirming which policy responds to a design error
- Anyone whose contracts specify cover — read what the contract asks for, because it frequently names both
What a contract is asking for
Where a client contract specifies insurance, it usually names the covers, the minimum limits and sometimes a requirement to be added as an additional insured.
A certificate of insurance evidences that the cover exists. It confers no rights of its own and does not alter the policy — it describes cover rather than creating it, which is why being named as an additional insured is a materially different request from being sent a certificate.
Read the requirement before agreeing to it. Contracts routinely ask for covers a business does not hold, and that is much easier to raise before signing than to resolve once work has started.
Common questions
If your work involves professional judgement and you also have premises, clients visiting, or physical work, then usually yes. They cover different kinds of harm and neither picks up the other's claims.
Cover responds based on when the claim is made rather than when the work was done. If the policy is not in force when the claim arrives, it generally does not respond, even for work carried out while you were insured.
Cover for past work generally ends with it. Extended reporting, or tail cover, is the mechanism that keeps that window open, and it is normally arranged at the point the policy ends.
Yes — professional indemnity, professional liability and errors and omissions all describe the same cover. The name varies by profession and by market rather than by what the policy does.
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This page is general information, not advice about your specific circumstances. A licensed insurance professional can tell you what’s actually available to you.
General information only, not insurance advice. Coverage, availability, and terms vary by insurer and by state, and are subject to underwriting. Quote My Policy LLC is a licensed insurance producer. Nothing here binds coverage.