General liability vs. professional liability (E&O)
One of the most common—and costly—misunderstandings in business insurance is assuming that general liability and professional liability overlap enough to “cover each other.” They don’t. Each policy is designed to respond to fundamentally different types of risk.
Understanding where the line usually sits, why it matters, and where gaps can form is essential—especially for service-based businesses, consultants, contractors, and any company whose value depends on advice, expertise, or professional judgment.
Why this distinction matters
Many claims that financially damage businesses are not accidents—they’re allegations of mistakes.
- General liability (GL) is built to handle bodily injury and property damage.
- Professional liability (E&O) is built to handle financial harm caused by errors, omissions, or negligence in professional services.
- Assuming overlap often leaves a gap where neither policy responds.
If a claim says “your advice, work, or judgment caused harm,” general liability is often the wrong tool.
What general liability is designed to cover
General liability protects against physical, tangible harm connected to business operations.
- Bodily injury: slips, trips, falls, or other physical injuries to third parties.
- Property damage: damage to someone else’s physical property.
- Personal & advertising injury: libel, slander, copyright infringement in advertising.
- Defense costs: legal defense even when allegations are groundless (subject to policy terms).
GL claims usually involve something visible, physical, or accidental.
General liability responds to “something happened.” Not “something went wrong.”
What professional liability (E&O) is designed to cover
Professional liability addresses financial harm caused by how work was performed—not by physical accidents.
- Errors: incorrect advice, design flaws, miscalculations, or oversight.
- Omissions: failing to do something that should have been done.
- Negligence allegations: claims that professional standards were not met.
- Financial loss: lost income, extra costs, or damages suffered by a client.
E&O claims often arise even when no physical damage or injury occurred.
E&O responds to “the work itself caused harm”—even if nothing was broken or injured.
Where the line usually sits
The dividing line is not the industry—it’s the nature of the allegation.
- Physical injury or property damage? General liability.
- Financial loss due to advice, design, or service? Professional liability.
- Client unhappy with results, not an accident? Likely E&O.
- Contract says “professional services”? General liability often excludes it.
Many GL policies contain explicit professional services exclusions that push these claims out of coverage.
If the claim exists because of what you know or decide—not what you dropped—E&O is usually the responder.
Why assuming overlap creates gaps
Business owners often assume one policy will “catch” what the other misses. That assumption fails in practice.
-
GL excludes professional services:
Many policies remove coverage once advice, design, or expertise is involved.
Even small consulting components can trigger the exclusion.
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E&O excludes bodily injury:
E&O is not meant to replace general liability.
Physical injury claims still belong under GL or auto.
- Defense gaps: If both policies deny, the business pays defense costs out of pocket.
- Contractual assumptions: Client contracts often assume E&O exists—even when it doesn’t.
Gaps appear not because coverage is “bad,” but because the wrong policy is expected to respond.
Common scenarios that trigger confusion
These examples show how quickly a claim can fall outside general liability.
- Consultant: client alleges bad advice caused lost revenue—no physical damage.
- IT provider: system misconfiguration leads to downtime or data loss.
- Contractor: design recommendation leads to costly rework.
- Marketing firm: campaign error causes compliance fines or missed launch.
In each case, nothing “accidental” happened—yet the financial impact can be severe.
Most E&O claims come from disappointed expectations, not disasters.
How this fits inside a business owner’s policy (BOP)
A standard BOP almost always includes general liability—but not professional liability.
- GL is built in: bodily injury, property damage, and advertising injury.
- E&O is usually separate: added as a standalone policy or endorsement (when available).
- Industry matters: some professions require specialized E&O forms.
- Contracts drive requirements: clients often require proof of E&O limits.
If your business provides advice, design, analysis, or specialized services, a BOP alone is rarely sufficient.
A BOP handles accidents. E&O handles accusations about your work.
Common questions
Is E&O only for professionals like doctors or lawyers?
No. Any business providing advice, design, consulting, or specialized services can face E&O exposure.
Does general liability ever cover professional mistakes?
Rarely. Most GL policies exclude professional services, even if the mistake seems minor.
Can I add E&O to my BOP?
Sometimes, depending on the carrier and industry. Many businesses need a separate E&O policy.
Different risks require different tools
General liability and professional liability are not interchangeable. One protects against physical accidents; the other protects against financial harm caused by professional judgment. Assuming overlap is one of the most common—and expensive—coverage mistakes business owners make. Matching the policy to the risk is what keeps claims from turning into personal financial losses.