General Liability vs. Professional Liability: Which Does Your Business Need?

Running a business is more than just offering great products or services; it also means protecting yourself from unexpected risks. Two of the most important types of coverage are general liability and professional liability insurance. But what’s the difference, and which does your business need?

General Liability Insurance: Broad Protection for Common Risks

General liability insurance helps cover claims related to bodily injury, property damage, and personal injury (like libel or slander) resulting from your business operations. For example, if a customer slips and falls in your store or a contractor accidentally damages a client’s property, this coverage may help pay for medical bills, legal fees, and damages.

In Colorado, where businesses often operate in diverse settings—from ski towns to tech hubs—general liability is considered essential. It’s often required for leasing commercial space or securing contracts, especially in construction, retail, and hospitality industries.

Professional Liability Insurance: Coverage for Services and Advice

Professional liability insurance (also called errors and omissions insurance) is designed for businesses that provide professional services or advice. It covers claims of negligence, misrepresentation, or failure to deliver a service as promised.

Say you’re an IT consultant or a real estate agent; if a client alleges your work caused them financial harm, professional liability can help cover legal defense and settlements.

In Colorado, licensed professionals such as lawyers, accountants, and healthcare providers may be legally required to carry this type of insurance, depending on their field.

Which One to Choose

Most businesses benefit from both types of coverage. General liability protects your physical operations, while professional liability safeguards your expertise. If you’re unsure, a local insurance broker can assess your risks and help you tailor a policy to fit your needs. Contact us today to get personalized advice on protecting your business financially.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.