Liability vs. Professional Liability

Ok, if you own a business you probably have General Liability coverage. This will protect you and your business in many ways. A typical definition of General Liability is:

"A standard insurance policy issued to business organizations to protect them against liability claims for bodily injury (BI) and property damage (PD) arising out of premises, operations, products, and completed operations; and advertising and personal injury (PI)liability."

There is a big difference between General Liability and Professional Liability is this:

"Professional liability insurance (PLI), also called professional indemnity insurance (PII) but more commonly known as errors & omissions (E&O) in the US, is a form of liability insurance which helps protect professional advice- and service-providing individuals and companies from bearing the full cost of defending against a negligence claim made by a client, and damages awarded in such a civil lawsuit. The coverage focuses on alleged failure to perform on the part of, financial loss caused by, and error or omission in the service or product sold by the policyholder. These are causes for legal action that would not be covered by a more general liability insurance policy which addresses more direct forms of harm. Professional liability insurance may take on different forms and names depending on the profession, especially medical and legal, and is sometimes required under contract by other businesses that are the beneficiaries of the advice or service."

So Professional Liability is a type of liability coverage designed to protect traditional professionals (e.g., accountants, attorneys) and quasi-professionals (e.g., real estate brokers, consultants) against liability incurred as a result of errors and omissions in performing their professional services.

There is a case in New York ( click Here to view full article ) where a landscaper was being sued along with the Landcscape Architect who designed it and was in charge of having an intersection built. Tragically, a little boy was killed in the incident.

In this case, the landscaper who fulfilled the requirements of the contract DID NOT have professional liability AND DIDN'T NEED IT! Why? They were completing the build per the plans as designed by the Landscape Architect...who did have Professional Liability.

It can be a little bit cloudy, but if you have any questions, please feel free to contact us. We Will Help! 909-481-7223 or email us at