General Liability (GL) covers physical harm — bodily injury or property damage you cause a third party. Professional Liability (also called Errors and Omissions, or E&O) covers financial harm caused by your advice, services, or mistakes — even when no one is physically hurt. They cover different risks, so many advice and service businesses need both. A general liability policy does not cover a professional error, and E&O does not cover a customer slip-and-fall.
Buyers constantly assume general liability covers "everything," then discover it does not respond to a claim about their work or advice. This guide draws the line between the two coverages with plain examples so you know which you need — often both. It is general education, not advice for your specific business; confirm with a licensed agent.
General liability — physical harm
General Liability responds when your business causes bodily injury or property damage to a third party:
- A client trips over your equipment at their office.
- You damage a customer's property while doing the work.
- Personal and advertising injury (libel, slander).
It is the coverage most leases and contracts require, and nearly every business carries it.
Professional liability (E&O) — financial harm
Professional Liability responds when a client suffers a financial loss because of your professional work, advice, or a mistake — even with no physical injury:
- Your advice or recommendation costs the client money.
- An error or omission in your work leads to a financial claim.
- A missed deadline or deliverable causes a loss.
It is essential for consultants, IT, real estate, accountants, designers, and any advice-based business.
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Side by side
| General Liability | Professional Liability (E&O) | |
|---|---|---|
| Covers | Physical: bodily injury and property damage | Financial: harm from advice, services, or errors |
| Typical claim | Customer slip-and-fall | Advice or work causes a client a financial loss |
| Who needs it | Almost every business | Advice and service businesses |
| Usual policy form | Occurrence | Claims-made (see occurrence vs claims-made) |
Who needs both?
Any business that both interacts physically with clients or the public and provides professional advice or services. A consultant who meets clients in person, an IT firm that visits sites, a real estate agent hosting open houses — each has both a physical-harm exposure (GL) and a professional-error exposure (E&O). Buying only one leaves a real gap.
How to decide
- Do people or property interact with your business? — you need general liability.
- Do you give advice or provide professional services? — you need professional liability.
- Both? — carry both; they cover different risks.
- Check the policy form — E&O is usually claims-made, so mind the retroactive date and tail.
- Confirm with a licensed agent.
Frequently Asked Questions
What is the difference between general and professional liability?
General liability covers physical harm — third-party bodily injury and property damage. Professional liability (E and O) covers financial harm from your advice, services, or errors, even when no one is physically hurt.
Do I need both general and professional liability?
Often yes. If people or property interact with your business and you also give advice or professional services, you have both a physical-harm exposure (GL) and a professional-error exposure (E and O). Carrying only one leaves a gap.
Does general liability cover mistakes in my work?
Generally no. Claims that your professional work or advice was wrong are covered by professional liability (E and O), not general liability. GL responds to physical injury and property damage.
Is professional liability the same as errors and omissions?
Yes. Professional liability and errors and omissions (E and O) are two names for the same coverage — protection against claims of financial harm from your professional services.
Which businesses need professional liability most?
Advice and service businesses: consultants, IT and tech, real estate agents, accountants, designers, and similar. Many clients also require it by contract.
Are these policies occurrence or claims-made?
General liability is usually occurrence; professional liability is usually claims-made, so mind the retroactive date and tail coverage. See our occurrence vs claims-made guide.
Quick glossary
- General Liability (GL)
- Covers third-party bodily injury and property damage — physical harm you cause.
- Professional Liability (E&O)
- Covers financial harm from your advice, services, or errors — even without physical injury.
- Errors and omissions (E&O)
- Another name for professional liability.