Professional Liability Insurance

General Liability vs. Professional Liability — Key Differences

General Liability vs. Professional Liability — Key Differences — what contractors need to know to protect against professional liability claims.

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Two Policies That Protect Against Completely Different Risks

Professional liability insurance (also called Errors & Omissions or E&O) protects contractors when a client claims your professional advice, design input, or project management decisions caused them financial harm. It covers legal defense costs and settlements — gaps that general liability leaves wide open.

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General Liability: Physical Harm to Others

General liability (GL) covers bodily injury and property damage you cause to third parties during your work. If a worker drops a tool and injures a bystander, or your crew damages a client’s flooring, GL responds. It’s the foundational coverage for any contractor.

Professional Liability: Financial Harm from Your Expertise

Professional liability covers financial harm a client suffers because of your professional services, advice, or design work. No physical damage needs to occur — the client claims your professional decisions cost them money. GL won’t touch this claim.

A Scenario That Illustrates the Difference

You’re an HVAC contractor who sizes and installs a commercial HVAC system. If the system falls and injures someone, GL covers the bodily injury. If the system is sized wrong and causes $200,000 in energy overcosts and comfort complaints, that’s a professional liability claim — GL pays nothing.

Claims-Made vs. Occurrence Forms

GL is typically written on an occurrence form — coverage applies to incidents that occur during the policy period regardless of when the claim is filed. Professional liability is almost always claims-made — coverage depends on when the claim is filed, not when the work was done.

Do You Need Both?

Any contractor who provides professional services — advice, design input, specifications, construction management — needs both GL and professional liability. They protect against fundamentally different risks and neither substitutes for the other.

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Frequently Asked Questions

Can I combine GL and professional liability in one policy?

Sometimes yes, through a contractor’s package or project-specific policy. However, most standalone professional liability policies are separate from GL. An independent agent can advise whether a package or separate policy is more cost-effective for your situation.

Does GL cover faulty workmanship?

GL typically excludes damage to your own work (the ‘your work’ exclusion). It may cover resulting damage to other property. Faulty workmanship claims are complex — consult your agent on how your specific GL policy handles workmanship disputes.

What if a client sues me for both physical damage and professional mistakes?

You’d file with both insurers — GL for the property damage component and PL for the professional services component. This is why having both policies with the same agent simplifies claims coordination.

Does professional liability cover subcontractors’ errors?

Your professional liability covers your professional errors. If a subcontractor’s professional error contributes to a claim, you may still be named — then subrogation occurs. Subs performing professional services should carry their own PL.

Is errors and omissions the same as professional liability?

Yes — E&O and professional liability are the same coverage, different names. E&O is commonly used in service industries; professional liability is more common in construction and engineering contexts.