As a small business owner or independent worker, selecting the right insurance coverage for your work is far from intuitive. You know you need it, but what will provide the best protection on the job? Do you need General Liability, Professional Liability, or a combination of the two?
To strike the right balance, it helps to get down to the basics: here’s what you should know about your business insurance options before selecting coverage for a job.
What’s Covered by General Liability Insurance
General Liability insurance policies are designed to provide protection for accidents that may occur on the job for a wide range of workers and professionals, from handymen and contractors to business consultants. These policies typically include three types of coverage: 1) bodily injury and property damage liability, 2) personal and advertising injury liability, and 3) medical payments.
Bodily injury refers to bodily harm, sickness, or disease, while property damage encompasses any harm to tangible property and/or loss of use of tangible property. Personal injury refers to offenses that produce harm other than bodily injury, including false arrest, detention, or imprisonment. Advertising injury includes offenses in connection with the insured’s advertising of its goods or services, such as libel, slander, invasion of privacy, and copyright infringement.
The third category, medical payments, covers medical expenses for bodily injury to a third party. To be eligible for coverage, the injury must have been caused by an accident on premises you own or rent or because of your operations.
What’s Covered by Professional Liability Insurance
Professional Liability insurance can serve as a complement to your General Liability policy depending on your coverage needs. Professional Liability insurance is designed to protect against claims that result from errors and omissions in the performance of professional services—in other words, when someone alleges that you’ve done your job improperly, Professional Liability insurance may kick in. As is the case with General Liability insurance, a wide range of professionals may benefit from this type of coverage.
Most Professional Liability policies cover economic or financial losses suffered by third parties, but not bodily injury or property damage (which are covered by Commercial General Liability insurance). The majority of these policies are “claims-made,” which means that only claims reported while the policy is in effect are covered. Most also include “shrinking limits,” which stipulate that the insurer’s payment of defense costs reduces available policy limits. This is not the case with General Liability insurance, where defense costs are paid in addition to policy limits.
Every insurance policy is different, and some General Liability insurance policies include an endorsement that changes the policy to include either partial or full Professional Liability insurance coverage. When purchasing a business insurance policy, always do your research to determine just what your policy covers. You can find more information about the policies arranged by Thimble in our support center.
Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.