General Liability vs Professional Liability: Which One Covers Which Claim?
Learning goal: Sort common small-business claims into general liability or professional liability, and know why a business owners policy usually leaves professional liability out.
Short answer
General liability is generally for bodily injury, property damage and advertising injury your business causes, such as a client tripping in your office. Professional liability is for claims that your advice or services caused a financial loss, such as a costly error in your work. They cover different risks, so one doesn't replace the other.
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The Fuller Picture
The question to ask about a claim is what kind of harm is alleged. A physical injury or damaged property points to general liability. A financial loss blamed on your professional work points to professional liability, also called errors and omissions. A business owners policy includes general liability, but not professional liability.
Key Takeaways
- The Texas Department of Insurance describes commercial general liability as protecting business owners "against claims of liability for bodily injury, property damage, and personal and advertising injury (slander and false advertising)."
- Professional liability, according to the Insurance Information Institute, covers claims such as "negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice."
- The Institute notes professional liability is "not included in an in-home business policy or Business Owners Policy (BOP)."
- General liability isn't meant for injuries to your own employees; the Texas Department of Insurance says CGL policies aren't intended to cover workers' compensation or employer's liability.
- Many professional liability policies are claims-made, so the policy generally has to be in force when the claim is made, not only when the work was done.
Real-World Example
Six claims, two coverages
A bookkeeper's client slips on a wet floor in her office and breaks a wrist: that's bodily injury, which points to general liability. A contractor drops a ladder and cracks a client's window: property damage, general liability. An ad claims a competitor's product is unsafe, and the competitor sues: advertising injury, general liability. The bookkeeper misses a filing deadline and the client pays a penalty: a financial loss from professional work, professional liability. A consultant's recommendation leads a client to lose money: professional liability. An employee is hurt lifting boxes: neither; that's generally workers' compensation. Whether a policy pays for any of these depends on its wording, its exclusions and the facts.
Common Mistakes
- Assuming a BOP covers mistakes in your professional work. It includes general liability, not professional liability.
- Thinking general liability covers any lawsuit. It's built around injury, property damage and advertising injury.
- Letting a claims-made professional liability policy lapse after closing a project, without checking what happens to claims made later.
Interactive Exercise
Sort your own business's risks
List the ways a customer or client could say your business harmed them, then sort each one.
Tick each step as you do it. Your checklist is saved in this browser.
Knowledge Check
Question: A freelance web developer's coding error takes a client's online store offline for two days, and the client claims lost sales. Which coverage is generally designed for this kind of claim?
Recommended Insurpedia Tools
- Coverage Builder: Answer a few questions about your home, vehicles, family and work, and see insurance topics worth researching for your situation, each linked to a plain-English explanation. It doesn’t tell you what to buy.
Related Insurance Terms
Related Scenarios
Questions to explore next
Questions readers often ask next about this topic:
- Do I need professional liability if I only give informal advice?
- What does "claims-made" mean if I retire or close my business?
- Can a single incident trigger both coverages?
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The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- Commercial general liability insuranceTexas Department of Insurance
- Professional liability insuranceInsurance Information Institute (Triple-I)
Educational information, not advice: This lesson is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers. What general liability covers and its workers' compensation limit come from the Texas Department of Insurance; professional liability and the BOP point from the Insurance Information Institute.