Skip to main content

Does my business need Professional Liability insurance?

While every business owner knows they need liability insurance to protect them from lawsuits, many don’t realize there are many types of liability insurance that offer different protections.

Which type does your business need?

General liability insurance is the most common and universally needed. It protects your business almost exclusively for claims of “bodily injury” and “property damage.” If your operations or product(s) cause bodily injury to someone, or cause property damage to someone’s property, your General Liability insurance will step in to provide for your legal defense and ultimately pay for any damages that you are legally liable for.

The second type is Professional Liability insurance, which protects you from damages you may be legally liable to pay for reasons OTHER THAN bodily injury or property damage.

Think of professions that require specific education, licensing, or training, and whose primary value is in the advice or professional guidance they offer—attorneys, accountants, insurance agents, architects, engineers, and real estate brokers, for example. If one of these professionals gives bad advice, you likely won’t suffer any bodily injury, but you could suffer financial consequences. This type of Professional Liability coverage is often referred to as “errors and omissions,” which is essentially an interchangeable term.

Keep in mind that even if your business is not traditionally thought of as a “professional” business like those listed above, you can have Professional Liability risk exposure. Examples of this can include:

  • Contractors—Especially if you do design work, or are involved in larger jobs in which installation errors can result in costly corrections and reinstalls
  • Manufacturers—If your manufacturing error results in financial loss to your customer
  • Mechanics—If your improper installation results in damage and requires that you reinstall the defective part

Sometimes it is tough to envision your Professional Liability exposure because these claims can be technical and complicated. 

Nevertheless, this is an important area of risk that can have devastating repercussions if not accounted for.

Please reach out if you’re not absolutely certain you have proper protection or would like to discuss your business situation.

Skip to content