If someone makes a claim against your business, whether it’s a customer that trips and gets hurt, or someone who claims your services, which led to a loss, your liability insurance policy provides you a financial shield.
It covers your legal bills, settlements, and other costs during such times according to your policy’s limits.
General liability covers if something happens to someone physically. For instance, if someone gets hurt at your business or something gets damaged, general policy will cover the bills. Professional liability, on the other hand, covers any mistake happened due to your services or advice that ends up costing your client money.
What It Covers | General Liability Insurance | Professional Liability Insurance |
What are you protected from? | It covers any physical or accidental property damage. | It covers your mistakes, missed deadlines, or bad advice that leads to a client’s financial loss. |
Who should care most? | If you meet customers in person or run a physical space, like a shop, studio, or office, then your business needs general liability insurance. | This is for consultants, designers, accountants, or literally anyone who is in advising business. |
Start by auditing what you do every day. The types of projects you take on, the clients you serve, and the size of your contracts. What is the type of your office? Is it a corner store, or are you taking on big construction projects?
The risks are different for everyone, your coverage should be set according to your business needs. Talk to your insurance broker to understand which policies will suit best to your business.
Here’s how you can figure out your premium:
How much coverage do you want (and what’s your comfort zone for deductibles)? Choosing higher limits gives you a bigger safety net, but you might pay a little more. On the flip side, picking a higher deductible can help lower your monthly cost.
You need an umbrella policy if a claim is bigger than what your regular policy covers. It means extra protection for a small added cost to your liability insurance policy.
You might need it if your business is growing, you own valuable assets, work in an industry where lawsuits are more common, or if your contracts require higher limits.
