General Liability and Professional Liability Insurance Defined
February 11, 2022
There are several types of liability insurances to help protect your business from third party claims. How to determine which ones best cover the risks for your particular company takes careful consideration and a knowledgeable insurance broker to help with risk assessment and evaluation. Below we have summarized a few of the different types of liability insurance that you will want to discuss with your insurance broker.
- General Liability Insurance, also known as “commercial liability insurance” is a broad commercial insurance policy that covers general liability exposures of a business. This broad type of coverage protects commercial insured’s from most liability exposures other than automobile and professional liability. A standard insurance policy issued to business organizations to protect them against liability claims for bodily injury (BI) and property damage (PD) arising out of premises, operations, products, and completed operations; and advertising and personal injury (PI) liability.
- Professional Liability Insurance protects professionals such as accountants, lawyers and physicians against negligence and other claims initiated by their clients. It is necessary for all professionals to obtain professional liability insurance because general liability insurance policies do not offer protection against claims arising out of business or professional practices such as negligence, malpractice or misrepresentation. Depending on the profession, professional liability insurance may have different names, such as medical malpractice insurance for the medical profession, and errors & omissions insurance for licensed professionals such as accountants, attorneys, insurance agents, architects, engineers and technology companies.
- Errors & Omissions (E&O) is professional liability insurance that protects companies and individuals against claims made by clients for inadequate work or negligent actions. Errors and omissions insurance often cover both court costs and any settlements up to the amount of coverage specified on the insurance contract.
- Directors and Officers Insurance (D&O) is a type of liability insurance covering directors and officers for claims made against them while serving on a board of directors and/or as a company officer. D&O liability insurance can be written to cover the directors and officers of for-profit businesses, privately held firms, not-for-profit organizations, and educational institutions. There is a variety of Directors and Officers coverage available such as corporate reimbursement coverage, personal liability, and entity coverage. D&O policies may be broadened to include coverage for employment practices liability as well.
- Employment Practices Liability Insurance (EPLI) covers employment-related liabilities other than on-the-job injuries. This can include legal fees and damages for suits such as wrongful termination, discrimination, sexual harassment, and other alleged violations of employees’ legal rights. If you have employees, The Armstrong Company Insurance Consultants recommends considering this type of coverage.
- Garage Liability Insurance is typically purchased by automobile dealerships and repair shops. It covers property damage and bodily injury resulting from the operations of an auto garage. It includes the ownership, maintenance or use of covered autos and all operations “necessary or incidental” to a garage business.
- Garagekeepers’ Liability Insurance provides protection for damage to customer vehicles due to the insured’s legal liability. This additional coverage is needed because of the “care, custody or control” exclusion in the liability section of the standard commercial general liability policy. This form of insurance is similar to bailee’s insurance.
- Medical Professional Liability (Medical Malpractice Insurance) insures for negligence by a health care provider resulting from a failure to use due care or where the standard of care falls below what is expected from a person in a particular profession. A medical professional liability insurance policy covers bodily injury or property damage as well as liability for personal injury such as mental anguish. Most policies also provide coverage to the physician for the costs in defending a claim. Read more
- Cyber Liability is another type of professional liability insurance that is fast evolving from its original intention of protecting the technology providers from alleged wrongful acts arising from their performance of services to necessary liability coverage for all businesses/industries who collect or have access to Personal Identifiable Information (PII) or who use computer hardware/software systems in their daily business. Read more