Small business insurance protects your business from financial hardships that may come your way. When looking for business insurance, you should always keep in mind the risks that accompany being a business owner. The risks can be significant, and so can the costs associated with those risks. Not only are you insuring the risks of your business, but also its property, employees, and anyone who comes in contact with them. A popular misunderstanding we come across is the difference between general liability and professional liability. If you have one, why should you need the other?
General Liability Insurance is exactly what the name suggests. It covers your business from a few general lawsuits that any business could face. A typical policy insures against claims of bodily or personal injury or property damage sustained by a third party. Your general liability policy will cover the legal fees and costs associated with your legal defense, settlements, and property damages as well.
Professional Liability Insurance, also known as Error and Omissions or Malpractice Insurance, covers negligence as it pertains to the professional services your provide. Though this policy is crucial for service providers to carry, most small business owners will benefit from its coverage. Professional liability insurance protects you from third party lawsuits alleging you provided negligent professional services, failed to uphold contractual promises, provided incomplete or shoddy work, or made mistakes/omissions on work provided. These lawsuits are among the most expensive a business can face. Having a professional liability policy can ensure you won’t be held responsible for legal expenses.
So which policy makes sense for your business? The honest answer is both. In most cases, businesses have found that having both policies adequately protects their business from the high cost of unexpected lawsuits.
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