These two policies get confused constantly, partly because both have “liability” in the name and partly because contracts ask for them in the same breath. The cleanest way to keep them straight: general liability is about physical harm, professional liability is about financial harm.
General liability: the physical world
General liability responds when your business allegedly causes bodily injury or property damage. The classic examples are concrete. A customer trips over your extension cord. Your employee knocks over a client’s server rack. Your plumbing work fails and floods the suite below. In each case, something physical happened to a person or to property, and GL is built for it.
GL also carries personal and advertising injury coverage for claims like libel, slander, and copyright issues in your advertising, plus products coverage for goods you sell. Landlords and contracts require GL almost universally because premises accidents are everyone’s shared nightmare.
Professional liability: the financial world
Professional liability, also called errors and omissions, responds when a client says your work or advice cost them money. No one got hurt; nothing got broken. The harm is financial. The consultant whose recommendation backfired, the bookkeeper whose error triggered penalties, the developer whose missed deadline cost the client a launch, the inspector who missed something material.
GL policies typically exclude professional services entirely, which surprises people. If clients pay you for expertise and judgment, GL alone leaves your largest exposure uncovered.
Same business, different claims
Picture a marketing agency. A client visits the office, trips on the stairs, and breaks a wrist: general liability. The same agency launches a campaign with a licensing error that gets the client sued: professional liability. One business, one afternoon, two completely different policies.
That’s why service businesses commonly carry both. The GL satisfies the lease and the obvious physical risks, usually at modest cost for office-based operations. The E&O covers the work itself, which is where a service firm’s serious claims actually come from.
Practical guidance
If you’re buying because a contract requires it, match the certificate to the contract exactly; the difference between the two coverages is precisely the kind of thing certificate reviewers check. If you’re deciding what your business needs, the question is simple: can your work hurt someone physically, cost someone financially, or both? Both is the most common answer for service businesses.
We quote these together every week. Tell us what you do and we’ll tell you which policies fit and what they’ll run.