A question we're asked a lot is "what's the difference between general liability and professional liability?" Let's talk about that today.
General liability, if we want to simplify it and break it down, it responds to two things - third party bodily injury and third party property damage. So if we're a business owner and we have a general liability insurance policy, primarily, it's going to respond to when a third party is litigating as a result of bodily injury or property damage to that third party. So you can think of things like a slip and fall in a parking lot as a primary example, or we're in the construction industry and we leave the welder on and we caused the fire to burn a building down, which caused property damage to a third party. That's really at the core of what the general liability policy is intended to respond to. Now, the professional liability policy is more for what we would consider monetary instances. It's really tied to our failure to render our professional services.
We think about things like medical doctors. Everybody has probably heard of medical malpractice. So if a doctor fails to act in their capacity as a physician, as a doctor, and somebody suffers a loss as a result, that failure to render professional services, those types of things are what a professional liability policy is designed to respond to. But it's pretty broad. There's a lot of different professions. I mean, if we're contractors or if we make a product, we have a professional obligation to uphold, that could cause a third party to have a monetary loss as a result of our failure to perform our duties as a professional.
A good example; we're a contractor, we do a heating and cooling, and we go through an apartment building for our client. We do the entire heating and cooling system in that building, and we find out that we've done it off-spec. We have to go in and tear out all that work and redo it. Our client, the apartment owner in this case, has their timeline delayed 120 days as a result, and now they're losing rental income and they're suffering a significant financial loss as a result. Our failure to perform our professional duties - those are the kind of things that a general liability policy is not going to respond to. Something like a professional liability policy is needed to respond to that type of event. It's really important to understand your business, understand those risks that exist where third parties can bring lawsuits against you. Unfortunately, all too often people think that that general liability policy. There may be a lot of gaps there and professional liability policies can do a really nice job of picking up some of those more professional exposures.
Hopefully that gives you something to think about. Reach out to our team and ask us questions and understand you policies. We're always here to help.
Call us at (402) 463-2461 or email us at info@ellerbrock-norris.com today.
