Understanding General Liability vs. Professional Liability Insurance

Running a business in Connecticut comes with plenty of opportunities—but also plenty of risks. Whether you’re a contractor, consultant, or small business owner, protecting your business from financial loss is critical. That’s where liability insurance comes in.

Two of the most common forms are General Liability (GL) Insurance and Professional Liability (PL) Insurance, sometimes called Errors & Omissions (E&O) Insurance. While they sound similar, they cover very different risks—and choosing the wrong policy can leave your business exposed. This guide will help Connecticut businesses understand the difference and make informed insurance decisions.

What Is General Liability Insurance?

General Liability Insurance protects your business from claims of third-party bodily injury, property damage, and advertising-related injuries. It’s often required by contracts, landlords, or clients, and it forms the foundation of most business insurance portfolios.

Covered Examples of General Liability

Scenario	Covered?	Notes
A customer slips on ice outside your storefront	✅	Bodily injury coverage
Your employee accidentally damages a client’s property	✅	Property damage coverage
Your advertisement accidentally defames another business	✅	Advertising injury coverage

Key takeaway: GL insurance is about physical or tangible risks—injuries, accidents, or property damage.

What Is Professional Liability Insurance?

Professional Liability Insurance (PL), also known as Errors & Omissions (E&O) Insurance, protects businesses that provide professional services or advice. It covers claims arising from negligence, mistakes, or failure to deliver promised services, even if no physical damage occurred.

Covered Examples of Professional Liability

Scenario	Covered?	Notes
An accountant provides incorrect financial advice, causing the client to lose	✅	Errors & omissions coverage
A consultant misses a project deadline, resulting in client penalties	✅	Professional services claim
An engineer designs a faulty structure, leading to damage	✅	Professional negligence

Key takeaway: PL insurance is about errors in professional judgment or service, protecting your reputation and finances.

Key Differences Between GL and PL Insurance

Understanding the differences helps business owners select the right coverage—or combination of coverages—for their needs.

Feature	General Liability	Professional Liability
Who it protects	Business from physical injury or property damage	Business from professional mistakes or negligence
Common claims	Slips, property damage, advertising injury	Mistakes in advice, errors in service delivery
Required by clients?	Often for contractors, retail, and service providers	Common for consultants, IT professionals, and healthcare providers

Bottom line: GL covers accidents; PL covers mistakes. Many businesses in Connecticut benefit from both policies.

Why Connecticut Businesses Need Both

Connecticut’s diverse business environment—from construction companies in Hartford to consultants in Stamford—faces unique risks:

• Contractor risks: Accidental damage on client sites (GL) vs. faulty workmanship claims (PL).

• Professional services: Advice or design errors leading to client losses (PL) vs. slip-and-fall accidents at your office (GL).

• Local regulations and contracts: Many clients and vendors require proof of insurance for both types.

Having both GL and PL coverage ensures that your business is protected from unexpected accidents and professional mistakes—keeping your finances and reputation secure.

How to Choose the Right Coverage

Here’s what to consider when deciding what your business needs:

1. Industry requirements: Some industries (e.g., healthcare, engineering, and financial consulting) often require PL insurance. Contractors may require both.

2. Client contracts: Check if clients or landlords require proof of GL, PL, or both.

3. Business size and risk exposure: Small businesses may combine coverages under a Business Owner’s Policy (BOP) for cost efficiency.

4. Work with a broker: An experienced insurance broker in Connecticut can tailor coverage to your risks.

Tip: At Insure Connecticut LLC, we help businesses identify gaps in coverage and find policies that protect both your assets and your reputation.

Understanding the distinction between General Liability and Professional Liability insurance is crucial for protecting your Connecticut business from financial and reputational risks. Many businesses find that having both policies provides the most comprehensive protection.

Don’t leave your business exposed—contact Insure Connecticut LLC today to review your coverage and ensure your business is fully protected. Call us at (860) 970-0977

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FAQ: General Liability vs. Professional Liability

Do I need both GL and PL insurance?

Often yes, especially if your business faces both physical risks and professional service risks.

Does my general liability policy cover professional mistakes?

No. GL covers accidents and property damage, not errors in professional services.

How much does professional liability insurance cost in Connecticut?

Costs vary by industry, size, and coverage limits. Small businesses may pay $500–$2,000 annually, while higher-risk professions may pay more.

Can a small business get a combined policy?

Yes, a Business Owner’s Policy (BOP) can sometimes combine GL, PL, and property coverage for convenience and savings.