Professional VS Ordinary Negligence

Professional VS Ordinary Negligence text overlaying image of a person under stress Any business can make mistakes, but companies that offer industry specific expert services or consulting are more vulnerable to negligence claims when they make a mistake. If your company gets sued due to a mistake or misleading information, it could hurt both your reputation and your bottom line. Negligence suits are one of the most common and expensive types of claims companies face. Negligence claims fall under two categories, ordinary, and professional. Knowing the difference between the two can help you avoid a costly lawsuit. 


Ordinary Negligence

Ordinary negligence is defined as a failure to use ordinary or normal care. It usually refers to a careless error that has caused harm to others. Ordinary negligence can be filed against any business or even individuals. And it is the basis for all personal injury lawsuits. Because they did not follow the duty of care, a person or business could be held accountable for physical or financial harm caused by the negligent mistake. Four things must be proven to establish ordinary negligence:

Duty of Care

The first thing a plaintiff has to prove is that you had a duty of care toward him or her. This usually means that you have a duty to take reasonable care not to hurt the plaintiff. However, states can change this standard of care by law for certain relationships, like a doctor-patient relationship. Usually, a person owes someone else a duty of reasonable care if they can see how their actions could hurt others. For example, a driver owes a duty of care to everyone else on the road by not texting and driving. A store owes a duty of care to their customers by putting a “Wet Floor” sign over a spill. In personal injury claims, duty of care is almost never disputed because it’s just about proving that there was a duty of care owed to the plaintiff, not whether or not it was broken.


If the client can prove that you had a duty of care to him or her. The next question is whether or not you broke that duty. A breach happens when someone doesn’t act with the same level of care that a normal person would in the same or similar situation. This is where someone needs to prove that you broke the duty of care. Using the examples above for instance, an ideal person wouldn’t speed or drive while drunk. So, a driver who did either of these things would have broken their duty of care to other people on the road. For businesses you wouldn’t ignore a fall hazard, you’d put up a caution sign or rope the area off. If you do ignore it then you’ve broken the duty of care.


Next, the complainant must prove that your breach caused him or her harm. That is, the harm would not have happened if you had fulfilled your duty of care. Also, the breach must be the direct cause of the injury. This means that the law must agree that the breach is linked enough to the injury to make you legally responsible.


The last step is for the plaintiff to prove damages. Lawyers and courts say that negligence without damages is “negligence in the air”. For example, a driver who speeds may be guilty of a crime. But if the violation didn’t hurt anyone else, the state can’t hold him or her responsible for negligence. In personal injury cases, plaintiffs often try to get paid for their medical bills, lost wages, property damage, loss of quality of life, and physical and mental pain and suffering. So, say they slipped on the wet floor but had no injury from the fall. While you caused the fall you didn’t cause any injuries that need compensation. 

Professional Negligence

Unlike ordinary negligence, the rules for professional negligence usually only apply to businesses that offer specialized skills and services to their customers or clients. When a professional doesn’t do what they should for their customer or client. This can include not doing a job with the right amount of skill and care, giving bad advice, or not acting quickly enough. 


Professional negligence can happen in any job. Such as with doctors, lawyers, accountants, engineers, builders, and other people who provide professional services. Professionals are required by law to do their jobs with a certain amount of skill and care. If they don’t, they could be held responsible for any harm that happens to their patients or clients. There are two common types of professional liability:

Breach of fiduciary duty

When you don’t act in the best interests of your client, you break your fiduciary duty. This can include making bad decisions, not giving important information, not telling the client about conflicts of interest. Or pursuing opportunities meant for the company without telling the client, and using insider or non-public information in a stock market transaction.

For a client to make a legal claim for a fiduciary breach, they have to prove three basic things:


  • There was a fiduciary relationship and responsibility
  • A breach happened
  • The breach caused damages to the client


Negligent misrepresentation is when you say something that you should have known wasn’t true but didn’t with the intention that your client will rely on it and suffer losses because of it. Some examples of misrepresentation are making false statements or promises in a contract or overstating the value or quality of goods or services. The misrepresentation doesn’t have to be in writing. It can be verbal. It can also mean not telling your client about all of the facts. There are 5 components to prove a misrepresentation claim:


  • There was an important comment about a certain product. And the comment led the client to sign the contract or make a decision
  • You knew that the information wasn’t entirely truthful or that you purposefully did not provide all of the facts
  • You made the statement or gave the advice with the intention that your client would rely on it to make a decision or enter into a contract
  • The client did in fact rely on that information

It’s not always easy to tell if a comment was a fact or someone’s opinion. And this can be a point of contention in a misrepresentation case. The court will look at how a reasonable person would have understood the information.


How To Avoid Professional Negligence Claims

If you offer the kinds of professional services that often lead to professional negligence claims. It’s important to be proactive and take steps to lower your risk of being sued. Let’s talk about a few of the best practices that could help you significantly reduce the risk of a lawsuit.


Whether it’s a new client or an extension of a project you’re already working on, you should always insist on a clearly written contract that explains the nature and the limits of the job. It’s important to include every detail you can about the job. Having a clear contract will lower the risk of a negligence claim because your exact promises or the possibility of certain portions of the contract may not work out are listed.


It’s easy to get carried away when you’re trying to get a client by making promises you’re not entirely sure you can keep. Even if you do have every intention of making it happen, there’s always the possibility of things not panning out. This is also a very easy way for a professional negligence claim to come about. Make sure you give your clients realistic expectations when you speak with them about how things will work out. Make sure to warn them about possible negative outcomes as well. This will help you avoid awkward and possibly expensive situations where your client feels they were cheated and should be compensated.


It is very important to have clear communication with your client. If you let them know about problems and changes in a timely manner, they will think you are more responsible, even if the news is often bad. Changes that come up quickly and out of the blue may make the client upset and more likely to sue you for professional negligence. Keep in touch with your clients often. Even if you have nothing new to say, let them know that you are still working on their project and are fully committed to it.


Unfortunately, a lot of cases of professional negligence start with “he said, she said” claims. The best way to deal with this is to keep careful records of all the professional services you provide. Email is always better than the phone for making deals and decisions because you can keep track of what was said and what was agreed upon. If you prefer to do business by phone or in person, record your talks with clients. If you don’t want to do that, get an email confirmation of what was agreed upon so you have a copy of what was said.


Keeping up with the latest changes in your industry will help protect you from professional negligence claims. Also, it’s important to keep up with changes to the way state rules govern duty of care.

How To Protect Your Business

Even when you’ve done everything to avoid a negligence claim, they can still happen to anyone. That’s why it’s important to be proactive and get ahead of possible claims by having a good risk management plan and the right business insurance to protect you. Professional liability insurance, which is also called “errors and omissions” insurance, will cover these kinds of cases. It will protect you financially from accusations of negligence, malpractice, errors, and omissions that could happen while you’re giving your clients professional services.


When a claim of professional negligence is made, your E&O policy will pay for your legal defense, judgements, and settlements up to the limits of the policy. It’s important to know that professional liability insurance is a “claims-made” coverage. This means that the policy had to be in effect when the event that led to the claim happened and when you told the insurer about the claim. Also, it’s important to remember that professional liability plans have things they won’t cover. One of the most common is when a professional does something illegal or hurts a client on purpose.

Call EZ

In general, all of the big insurance companies offer professional liability insurance. If you already have business insurance, talk to your insurance company about the possibility of adding professional liability to your coverage. But working with an insurance agent is your best bet. The agents at EZ are well-trained and work with some of the best companies in the country. We can look at all your policy choices and work with your budget to make sure your business has all the coverage it needs. If you would like to see quotes online simply enter your zip code in the box above. If you would like to speak to an agent now call 877-670-3538 today to talk to get a free quote.


Business Insurance For The Self-Employed

business insurance for the self-employed text overlaying image of a mom working from home More and more Americans are leaving their cubicles to work on their own. Well, why not? You decide how to run your business. You decide when to work. Who is on your team is up to you. Those are some great perks. So it’s not surprising that there are 15 million self-employed professionals in the American workforce right now, and that number could nearly triple in the next two years.


But there are some things you can’t control or plan for in business or in life. What if something goes wrong on the construction site and one of your clients gets hurt? Or what if you get hurt in a freak accident and can’t work anymore? Those “what if” questions are enough to turn the dream of a self-employed entrepreneur into a nightmare. So, if you work for yourself, you need insurance to protect yourself, your family, and your business. You’ve worked too hard to leave anything unprotected. But how do you know which types of insurance for self-employed people need and don’t need? Let’s look at types of insurance that will make you feel safe.

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Self-Employed Business Insurance

Whether you’re a plumber or a freelance writer, there’s always a chance of something going wrong with your job. Some people are more likely to get hurt on the job, while others may be more likely to be sued. If you work for yourself, you need some kind of business insurance to cover the risks of your work. Here are the four most important types of business insurance to look into.

1. General Liability 

Liability insurance will protect you financially in the event that someone sues you for damages after slipping and falling in your coffee shop. Or breaking an expensive vase while cleaning a client’s home. Slander suits are also covered by general liability insurance. This sort of protection is available both as a separate policy and as part of a business owner’s policy.

2. Professional Liability

Listen, we all have our flaws, and everybody messes up sometimes. This is where professional liability comes in handy. It’s insurance that protects you in the event that a client is harmed as a result of a service you provided or advice you gave. It is also known by its more common name, errors and omissions insurance. Professional liability insurance covers financial losses in the event of injury or damage. While general liability insurance covers injuries and damages to property.

3. Business Owner’s Policy (BOP)

A business owner’s policy (BOP) gives your small business protection against a wide range of claims. It does this by combining two types of coverage. Commercial general liability insurance and Commercial property insurance are both parts of its coverage. 


The part of a BOP called “general liability” protects your business in case someone makes a claim against you or your business. General liability insurance protects you from lawsuits if something like a customer slipping on a wet floor. Or a faulty product causing damage to a client’s property. Or a claim that your products or services hurt someone. It can also protect you from libel, slander, and certain advertising lawsuits.


The property part of a BOP helps protect the buildings, equipment, furniture. And stock that you own, rent, or lease for your business. It helps pay to fix or replace things that are stolen, broken, or destroyed, even if they don’t belong to you but were in your care. It can also pay for things like rent, payroll, and other bills while your property is being fixed or replaced after a fire or other covered loss.

4. Workers’ Compensation

If you have employees, no matter the nature of your business, you are required by law to carry workers’ compensation insurance. Workers’ compensation insurance, also known as “workers’ comp,” is a mandatory type of coverage that will provide financial support to your staff if they sustain an injury while performing their job duties. It serves as a disability insurance pool that reimburses workers monetarily and/or provides medical care in the event of an illness or injury. If you want to learn more about the workers’ compensation laws in your state, you can visit the state by state guides on our site.

5. Cyber Liability

Physical dangers such as injury and property loss are ever-present in the business world. However, there are dangers associated with using technology that could affect your company. Data leaks and hacking are just two examples. Information about customers’ identities or medical histories that you store on company computers is a prime target for hackers. In order to quickly recover from a data breach or cyberattack, it is crucial that your company be covered by data breach or cyber liability insurance.

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Self-Employed Health Insurance

If you’re in business for yourself, it’s important to have a basic understanding of health insurance. As a first step, you should enroll in a health insurance plan. If you do not have health insurance this year, you could be fined by the government depending on what state you live in. More importantly, you and your loved ones are taking a serious risk if and when a medical emergency arises.


In addition, if you have been relying on your employer to provide health coverage, you may be in for a rude awakening when you compare prices. Since you no longer have an employer to split the cost of health insurance with, you must do so on your own. The good news is that self-employed professionals can reduce their tax liability by deducting the money they spend on health insurance premiums.

How To Reduce The Cost Of Self-Employed Health Insurance

A high-deductible health plan (HDHP) is a good option for those looking to save money on health insurance premiums. A higher deductible on your health insurance plan means you’ll have to pay more out of pocket for medical care before your policy kicks in. However, the trade-off is cheaper premiums every month.


Opening a health savings account (HSA) is an option with your high-deductible health plan, making it an even better value. The funds built up in a health savings account (HSA) are exempt from federal income tax, allowing you to save tax-free for future medical expenses. It’s a good idea to consult with an EZ agent, who can explain your options and guide you toward a policy that works for your finances and your loved ones. They will assist you in locating competitive rates and suitable protection.

Self-Employed Disability Insurance

If you’re self-employed and become ill or injured and unable to work, disability insurance could help replace some of your lost income. There are both public and private options for disability insurance. The government provides some options, such as the Social Security Administration and some state programs. 


When you’re self-employed, you can buy your own disability insurance policy rather than participating in a potentially more expensive group plan through your employer. You may still be eligible for a group policy through your spouse’s employer or a trade group. You may have more options with an individual policy, but the premiums may be higher. Policy features such as the waiting period, riders, and the definition of disability may be up for negotiation.  

Short vs Long Term Disability Insurance

Disability coverage comes in two flavors: long term and short term. Long term disability insurance typically has an elimination period of several weeks to months and a benefit period of several years up until retirement. There may be no waiting period or one as long as two weeks before benefits begin with short term disability insurance. Although long term disability insurance that pays out until retirement age is ideal, a short term policy could be worthwhile as well. In general, shorter waiting periods and longer benefits payout periods tend to come with higher premiums.


For an additional premium, you can secure coverage that the insurance provider can’t revoke for any reason (including your failure to pay premiums) with a noncancelable policy. With guaranteed renewable policies, the insurer cannot cancel your coverage. But they can raise your premiums along with other customers in your rating class.  Additional riders, such as cost-of-living adjustments (COLA), residual benefits in the event of a partial disability, premium refunds for going claim-free, premium waivers in the event of a disability, and so on, can be purchased for an additional cost.

EZ Can Help

Working independently or as a freelancer allows for more freedom and a better work-life balance. One disadvantage is that you will be responsible for arranging your own insurance. It’s essential that you do this. Since an accident or emergency can cause financial ruin if you don’t have the proper insurance.  As a result, self-employed people who don’t have insurance are taking a risk by not doing so. However, EZ can help! We offer free instant quotes on business insurance and we can even help you find the best plans for you. Enter your zip code in the box below or call one of our licensed agents at 877-670-3557 to get started.

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Busting the 4 Most Common Myths about Business Insurance

Being the boss means you get perks like getting to do something you are passionate about on a daily basis. And make a living from it. What perk is better than loving going into work every day!  But it also comes with a lot of responsibility. You’re responsible for your entire company. And there are plenty of risks in the business world no matter how small your business is. The best way to protect your company is with business insurance. 

We can already see you rolling your eyes. There are so many stereotypes about business insurance it’s hard to know what to believe. We’re busting some of the most common myths to help you sort through all the misinformation. So you can start to look for the coverage that’s right for your business.Article title over two signs one sign says fact and points right and the other sign says myth and posts left

1.General Liability Covers Everything

As easy as it would be if this were true, it’s actually false. General liability coverage (GLC) is pretty comprehensive. But it still has limitations. Every business is different. And every business should have a policy built around its unique needs.

So, what does GLC cover? General liability covers things that fall into the following three categories:

  • Bodily injury and property damage – GLC will cover bodily injury or damage to property caused by you or your employees.
  • Medical expenses – Additionally, it will pay for any medical costs for anyone hurt on your property. And any injuries brought on by business operations offsite.
  • Personal and advertising injury -You will be covered for any libel or slander claims, as well as in case of a copyright infringement claim.

It’s very important to know what a general liability policy will cover. But it’s just as important to know what it won’t cover. Here are the more common exclusions, just to give you an idea of what your GLC may be missing:

  • Operation limitations – Policies for high-hazard businesses will have limitations. These limitations might deny coverage for some problems that arise from specific operations. Be sure to check your policy to make sure all of your business operations are covered.
  • Contractor and subcontractor exclusion – This means any work done by contractors you hire will not be covered. If your business is heavily based in construction, you will want to watch out for this.
  • Expected or intended injury – Any injury or property damage that is found to be intentional will not be covered by GLC.
  • First party damage – Any injury or property damage to yourself or your belongings would generally not be covered by GLC.
  • Product recalls – With this exclusion, any problems or costs that come with recalls to products you sell or use would not be covered. 

While GLC covers the basics, the list of exclusions can go on and on. Every policy will have different exclusions. It’s best to check your policy to see what else your specific business might need. 

2. My Home Insurance Covers My Home-Based Business

What if your workplace is in your home? Will your home insurance cover your business? Unfortunately, no. Even though your homeowner’s insurance covers your home and its contents, your business is separate. And your policy will not cover any losses associated with your business. But don’t worry, there are a few insurance options that can help:

  • Business property insurance – This covers damage to any equipment in your home that you use for your business. That includes computers, printers, furniture, appliances, etc.

    illustrations of things like cars people buildings and money shaping a house
    There are plenty of commercial insurance options for a home-based business.
  • Liability insurance – If your business requires anyone coming into your home, this will cover any injuries or property damage.
  • Professional liability – This insurance is something most professionals need no matter where they work. It safeguards you from possible negligence or failure to meet standards.
  • Product liability – This coverage will protect you from any damage caused by products you make, sell, or supply to clients.

If your home is your storefront, you’ll need to protect it just like any other brick and mortar business.

3. I Don’t Need Commercial Auto Insurance

If you don’t own a company vehicle, you might think that you don’t need commercial vehicle insurance. That is not entirely true. Just like your homeowner’s insurance, your auto insurance will only cover your car for personal use. For example, getting to and from work. If you get into an accident while working your personal auto insurance will not cover you.

You might need commercial auto insurance if you transport products or visit clients and worksites. You might even need coverage if you send or receive packages at the post office. These policies usually include:

  • Coverage for medical bills – No-fault or personal injury protection will cover the medical expenses of anyone injured in a car accident regardless of fault.
  • Uninsured motorist coverage – If you are hit by someone who doesn’t have insurance, or are a victim of a hit-and-run, this will cover any damages from the accident.
  • Comprehensive and collision coverage – This will cover any theft, vandalism, flood damage, or damage from an object hitting your car.

Even though your company doesn’t own your personal vehicle it still needs commercial insurance. During off hours your personal auto insurance will have your back. But during business hours you need commercial insurance to fill in the gaps.

4. Business Insurance Is Too Expensivea person sitting on a pink piggy bank

It’s tempting to try and find ways to save money for your business, but if you cut the wrong costs you could end up losing the money you were trying to save and then some. If you don’t cover your business properly, you open yourself up to any number of financial risks. And business insurance isn’t as big of an expense as you might think. Especially considering the money it could save you.

Let’s look at the average costs of some of the types of coverage we’ve talked about:

  • General liability – Around $88 a month
  • Business property insurance – Around $65 a month
  • Professional liability – Around $97 a month
  • Product liability – Around $100 a month
  • Commercial auto insurance – Around $167 a month

While those amounts do add up, and prices can differ depending on the risk and the size of your business. It’s still probably less scary than what you imagined. Now imagine you get sued and you don’t have coverage? Legal services can cost between $100-$300 an hour depending on the case. That doesn’t include what you might have to pay if you don’t win.

The Takeaway

The you pay price to insure your business is much less than what you’d pay without it. Having the right business insurance will give you peace of mind. Your insurance company will handle the legal worries while you focus on your business. You protect every other part of your life with insurance, so your business – your livelihood – should be no different. If you need help deciding what insurance best fits your business we’re here to help! EZ.Insure will help you tailor your insurance to you, so come to us for your free quote today. To get started, simply enter your zip code in the bar above, or speak to an agent directly by calling 888-615-4893.

Co-written by Brianna Hartnett

How Independent Contractor Insurance Can Help Your Small Business

Once your business is up and running, you might come to the realization that you can’t do it all, and you’ll need more help. Instead of hiring a full-time employee to handle some projects, you might opt to go for an independent contractor, vendor, or other third party. This can be a great  choice for you as a small business owner, because you will save money while still getting the jobs done that will help your business grow. If you do decide to go this route, though, you need to know the possible pitfalls of hiring independent contractors without being properly insured. 

Insurance Optionshand with a pen in it offering it to another hand with papers in the other hand.

If you decide to expand your workforce with independent contractors, you need to be aware that you might have to upgrade your commercial insurance. If the independent contractor you hire is not insured and makes a mistake, it could end up costing you a lot of money, because your client can sue both you and the contractor for financial damages. It is important to be protected in these instances. So you have two options:

  1. Hire an insured contractor, so if something goes wrong and you are sued, you will be able to sue the contractor and recoup some of your losses. You can check if they have coverage by reviewing their certificate of liability insurance.
  2. Add your independent contractor to your general liability policy as an additional insured. This means that they are covered by your insurance for the duration of the job. Make sure you have the right commercial insurance policies that will cover temporary staff and independent contractors for any work they perform for your business.

Policies You Should Have

If you hire independent contractors, whether they have their own insurance or not, you should be prepared for the worst. There are a number of different commercial insurance policies to consider, including:purple umbrella with the word insurance underneath it and raindrops coming over the umbrella.

  • Contractors errors and omissions insurance (Contractors E&O) is an excellent option for protecting you against the cost of lawsuits related to any mistakes your contractor might make. While standard E&O policies will provide protection from any claims of negligence or failure to perform your professional duties, they often will not cover independent contractors.
  • General liability insurance is a policy all businesses should consider having. You can add a contractor to your policy as an “additional insured” so the policy will cover accidents, property damage and physical injuries that the contractor can cause you, your employees, or clients.

Compare Quotes

Considering the cost of court fees, medical expenses, and repairs that might arise from negligence or accidents, having the appropriate insurance coverage is less expensive than risking the financial strain of a large liability claim. To save money, compare free quotes with an EZ agent. We will provide you with one agent who will go over your businesses needs and compare all available commercial insurance quotes in your area to find you the policy with the most coverage and savings. To get free instant quotes, simply enter your zip code in the bar above, or to speak directly with one of our agents, call 888-615-4893. No hassle, no obligation.

What Is An ACORD Certificate?

If you’re a business owner who works with contractors or has clients perform jobs for you, you have probably requested a certificate of insurance (COI) – or perhaps businesses you have worked with have requested to see yours. This certificate is a document that proves that a business or contractor is insured. It details how much and what kind of coverage you have, and lets you and others know that you are protecting your business against any accidents or mistakes. One of the most popular and commonly requested types of COI is called an ACORD certificate, so let’s take a look at what this is and whether you need one. 

What Is ACORD Certificate? stamp next tot he word certified in red.

ACORD certificates are governed by the Association for Cooperative Operations Research and Development. This association is a non-profit organization that provides the standardized forms and certificates for almost 90% of US property and casualty insurance carriers. Before ACORD created standardized forms, insurance companies had their own policy forms, which made it confusing for agents and brokers. 

The standardized forms now make it easier for small business owners to review their insurance and prove to customers and partners that they are insured. If a document meets the ACORD’s standards, it will have “ACORD” stamped on the top left corner of the document. The insurance agency information will be located just below the stamp.

The ACORD 25 form, also known as a certificate of insurance (COI), is a type of liability insurance certificate that provides evidence of liability insurance, such as general liability insurance or professional liability insurance, and is the most commonly requested certificate of insurance. 

Benefits Of ACORD Certificates

When you purchase any type of liability insurance, ask your agent for an ACORD certificate so that you can provide it to any client or business partner that you want to work with. Having this certificate shows that you are covered, and that any business or client that works with you will not have to shoulder liability for any problems that arise. 

ACORD certificates are categorized by number, so you have a better understanding of the forms you need to send to prospects and receive from contractors. Some of the most popular forms used in the insurance industry are:

mans hands in a suit signing paperwork
When working with a contractor or client, you can make sure they have liability insurance by asking for an ACORD certificate.
  • Certificate of Liability Insurance (25)
  • Evidence of Property Insurance (27)
  • Certificate of Property Insurance (24)
  • Evidence of Commercial Property Insurance (28)
  • Additional Remarks (101)

If you are going to work with a contractor or another company, you need to make sure they have their own liability insurance. This will protect your business in the event that they make a mistake, damage a customer’s property, or cause physical harm through their negligence. The best way to do this is by asking them to send you an ACORD certificate. You should be able to do the same if asked for proof of insurance; when you quickly send an ACORD certificate, it shows that you are responsible, which will put people at ease and ensure that they will want to work with you.

If your insurance carrier does not issue ACORD certificates, it might be time to switch carriers to one who is compliant with industry standards. If you want to learn more about ACORD certification, or if you have any other commercial insurance questions, an EZ agent can help! One of our agents will assess your business’ needs, compare plans in minutes, and find a policy that’s right for you. To get free instant quotes, simply enter your zip code in the bar above, or to speak directly with one of our agents in your area, call 888-615-4893.

General Liability Vs. Professional Liability

Just one single lawsuit can damage your business beyond repair, so there’s no doubt that you need liability insurance. But it can be a challenge to figure out what kind of commercial insurance your business needs. Different policies cover different risks and claims; in fact, one of the most common questions from small business owners is “What’s the difference between general liability and professional liability insurance?” Both cover different types of risks, and figuring out how each works can be confusing. Understanding how they compare will help you make the best decision for your business. You might even need both!

What Is General Liability Insurance?

brown gavel
Court, attorney fees and settlements will be covered under general liability insurance.

General liability insurance is the most basic kind of commercial insurance. It covers costs if a third party accuses your business of causing them physical harm, damaging their property, harming their reputation through slander, or advertising errors that infringe on their copyright. These policies are usually written on an “occurrence” basis, which means that all losses will be covered during the time of the policy period, regardless of when you file the claim. General liability insurance will cover expenses including:

  • Court costs
  • Attorney’s fees
  • Settlements
  • Judgements
  • Third-party medical bills
  • Third-party repair bills

What Is Professional Liability Insurance?

Professional liability insurance, which includes errors and omissions, or E&O, insurance, covers legal defense if a third party claims they suffered a financial loss as a result of your negligence. It is written on a “claims made” basis, which means that the damages had to have occurred within the active policy period or they will not be covered. Some of the claims that professional liability insurance covers include:

  • Negligence
  • Inaccurate professional advice
  • Failure to uphold contractual promises
  • Work that was not completed
  • Work mistakes or omissions
caucasian man and woman mad at an African american man in a suit sitting at a desk.
Both insurance policies will cover you in the event of any damages to third parties.

Coverage will typically pay for:

  • Attorney’s fees
  • Court costs
  • Investigator’s bills
  • Settlements
  • Judgements

How They Are Similar

Both protect against business liabilities and cover:

  • Damage to third parties.
  • Accidental damage, not intentional damage
  • Restricted coverage within a specific area; if you go outside that area you will not be covered. 

How They Differ

The main difference between general liability and professional liability insurance is the risks they cover. General liability insurance will cover physical risks, like bodily injuries or property damage caused by your business’ daily operations. Professional liability covers financial losses resulting from negligence, errors, or omissions that occur when you provide your services to others.

Who Needs General Liability Insurance?

Every business owner should consider buying a general liability insurance plan to protect their assets. Accidents happen, and when you own a business, these accidents can be quite costly. You should consider general liability insurance if you:

black and white photo of the back of a woman sitting in front of a computer screen.
If you have a home based business, then general liability is necessary. If you provide professional services or advice, then professional liability is necessary. 
  • Have customers visiting your location.
  • Rent a physical location.
  • Handle other people’s property.
  • Own a home-based business.
  • Sell, manufacturer, or distribute products.
  • Advertise your services.

Who Needs Professional Liability Insurance?

Professional liability insurance is important to consider if your business provides professional services and has specialized professional training. Some professionals might even be legally required to obtain this type of insurance. You should consider a professional liability insurance plan if you:

  • Provide professional or technical services or advice.
  • Are expected to maintain professional standards.

Some examples of people who should have professional liability insurance are lawyers, consultants, accountants, and technology inspectors.

Which Do You Need?

In many cases, you will need both policies to fully protect your business from an unexpected lawsuit. EZ.Insure provides licensed agents who are highly trained in commercial insurance and can help determine which policy better suits your business, or if you need the coverage of both types. We will compare all plans and find the plan that offers the most coverage at the best price. To get free quotes, simply enter your zip code in the bar above, or to speak with one of our specialized agents, call 888-615-4893.