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What is General Liability VS Errors and Omissions?

urbanikadam

Updated: Jul 30, 2024



  1. Coverage Purpose:

  • General Liability (GL) Insurance: GL insurance provides coverage for claims related to bodily injury, property damage, and personal injury (such as slander or libel) that occur as a result of your business operations. It is often referred to as "slip-and-fall" insurance because it covers accidents and injuries that happen on your business premises.

  • Errors and Omissions (E&O) Insurance: E&O insurance, also known as professional liability insurance, provides coverage for claims arising from errors, omissions, or negligence in professional services or advice provided by your business. It is typically relevant for professions that offer specialized services, such as lawyers, doctors, consultants, and financial advisors.

  1. Types of Claims Covered:

  • GL Insurance: Covers claims related to physical harm, property damage, and personal injury that arise due to your business's general operations or premises.

  • E&O Insurance: Covers claims related to financial losses or harm caused by professional errors, inadequate advice, or failure to perform professional duties.

  1. Industry Specificity:

  • GL Insurance: It is more commonly associated with businesses that have a physical presence, such as retail stores, restaurants, and contractors.

  • E&O Insurance: It is typically required for businesses that provide professional services, advice, or expertise, such as legal firms, medical practices, and technology consulting companies.

  1. Coverage Limitations:

  • GL Insurance: Primarily covers bodily injury and property damage claims. It may not cover claims related to professional services or advice.

  • E&O Insurance: Specifically designed to cover claims related to professional services and advice. It may not cover bodily injury or property damage claims.

  1. Cost:

  • The cost of insurance premiums for GL and E&O insurance can vary widely based on factors like the type of business, its size, location, industry, and the coverage limits selected.

In summary, GL insurance focuses on physical injuries and property damage liability resulting from general business operations, while E&O insurance is tailored to cover claims arising from professional errors, omissions, or negligence in the delivery of specialized services or advice. Depending on your business type and activities, you may need one or both types of insurance to adequately protect your business from different types of risks. It's essential to assess your specific needs and consult with an insurance professional to determine the most appropriate coverage for your business.


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