Do you know what’s the difference between professional & general liability insurance in Canada?Quite frankly, the difference between professional & general liability insurance is a very common question we hear from business owners. But before we answer what’s the difference between professional & general liability insurance it’s important to note that insurance companies build insurance products in silos. This is because one insurance product can’t cover everything. You see, the variables used to underwrite each insurance policy are quite different and ultimately correlate to the specific risk being insured. Show
Ok. So the key difference between professional & general liability insurance……starts with a definition. Professional liability insurance is often referred to as Errors & Omissions Insurance, E&O or Professional Indemnity. More specifically, it covers individuals and organizations from liability for alleged financial losses their clients could bring against them based on advice and/or services they did or didn’t provide to clients who have paid them for their advice and/or services. This is why with professional liability insurance……in most cases, bodily injury or property damage caused as a result of their professional services performed are excluded, with the exception of architects, engineers and a few other professions. Some examples of professional liability claims can include:
And why with general liability insurance……in contrast, general liability insurance covers bodily injury or property damage caused to third parties and explicitly excludes liability for financial losses associated with services provided to clients for a fee, which is commonly referred to as the professional services exclusion. In more practical terms, the general liability policy is typically quite broad in scope and covers things like slip and falls, products liability issues, accidental damage by a business tenant to a leased location, etc. With general liability, the key is that there has to be bodily injury or property damage for this policy to respond. Ultimately the key difference involves specifics.As you can see, the difference between professional & general liability insurance is primarily based on the type of damages incurred with professional liability covering strict financial loss without the need for bodily injury or property damage and general liability requiring bodily injury or property damage in order to trigger the policy. Professional liability and commercial general liability insurance are very similar: they both cover legal expenses in the event you’re held liable for a particular type of damage. The difference between professional liability and commercial general liability is the type of damage they’ll cover you for: professional liability insurance can cover you in the event you’re held liable for financial loss due to your professional service or advice whereas commercial general liability insurance can cover you if your business is held liable for bodily injury or property damage. All businesses require commercial general liability insurance whereas only businesses that provide a service or professional advice require professional liability insurance. So, your business may only require one or it may require both. We’ll break down what exactly these insurance coverages offer. What does a professional liability policy cover?A professional liability policy offers protection in the event you’re held liable by a client or third party for financial loss as a result of your provided professional service or advice – or failure to provide it. It covers legal expenses including defence costs, settlements, and awards. Situations can include:
Keep in mind that even if you’re not at fault, you’ll still need to pay to defend yourself and your business’ reputation. Lawsuits can cripple you financially; professional liability insurance helps provide financial security and peace of mind. You may also be required to have this insurance in your contract or by your regulatory body, depending on your profession or industry. Not all situations are covered, including intentional acts that result in financial loss. You’ll also be responsible for paying a deductible for each covered claim and policy limits apply (meaning only a certain amount will be paid out across the 12-month policy term, regardless of how many claims are made). What does a commercial general liability policy cover?This is the most basic liability insurance for businesses. It covers you in the event someone is injured or has their property damaged and they hold your business liable. Your commercial general liability insurance could cover your legal expenses, including defence costs, settlements, and awards. For example, if someone walks into your office, trips, and breaks their wrist, they can hold your business liable for their damages. A commercial general liability insurance policy would help protect your business’ financial security. Professional Liability vs. Commercial General Liability Insurance: Which do I need?Every business should have a commercial general liability insurance policy, as third party injury or damages can occur regardless of your industry. If you provide a professional service or professional advice, you should also have a professional liability insurance policy. Together, these policies work to protect your business in the event you are sued under a variety of circumstances. EasyCover offers affordable, comprehensive professional liability and commercial general liability insurance. You can also talk to one of our expert insurance brokers if you need help or have any questions about this coverage. What is the difference between commercial general liability and public liability?Tip. Public liability insurance covers injuries suffered by visitors to your business property. General liability coverage is more extensive, including visitor injuries, employee injuries and defective-product damages.
What is covered under a commercial general liability policy?Commercial General Liability (CGL) insurance protects business owners against claims of liability for bodily injury, property damage, and personal and advertising injury (slander and false advertising).
What is excluded from a commercial general liability policy?Bodily injury or property damage that may result from the use of aircraft, watercraft, or autos that are owned, operated, or rented or loaned to any Insured is excluded.
How many coverage parts are in a commercial general liability policy?Five sections make up the CGL: coverages, who is an insured, limits of insurance, conditions, and definitions. Coverages are available on either an occurrence or a claims-made basis for bodily injury and property damage, personal and advertising injury, and medical payments, each subject to many exclusions.
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What is the difference between commercial general liability and general liability
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