It can be difficult to understand the difference between general and professional liability insurance for construction management firms. On paper, unless you read them carefully, you might think they are the same. They are not.
General Liability Insurance
This type of liability insurance covers actual physical risks of doing business in the construction industry. This can mean bodily injury to others and property damage. Most general liability insurance policies cover medical claims, reputational harm, advertising errors and any other issue you or one of your employees creates.
Professional Liability Insurance
Professional liability is a bit murkier when it comes it what is covered and who is responsible. It covers you for mistakes that you and your employees might make. These mistakes could be clerical mistakes or a result of negligence. Professional liability insurance is also sometimes known as errors and omissions or E and O insurance. Some of the problems it protects against are:
- Errors in the service
- Accidental omissions
- Good faith violations
If someone sues you for any of these things, it is usually covered under professional liability insurance.
In the construction industry, you need both types of insurance to be fully protected. General liability isn’t enough when you consider that accidents can happen, and so do mistakes.