General liability insurance and errors and omissions insurance are both liability policies that cover businesses in case of lawsuits. The nature of these lawsuits makes the difference between these policies, however.

General liability insurance covers claims regarding nonprofessional negligence while errors and omissions insurance covers professional negligence.

What Does General Liability Insurance Cover? 

General liability insurance covers bodily injury, property damage and advertising or personal injury that occur in the course of normal work activity. This means nonprofessional negligent acts. For example, if someone slips and falls in your restaurant, general liability insurance can help pay for their medical bills as well as any legal fees the business may face after a lawsuit concerning the injury.

Personal and advertising injury refers to claims from those such as competitors. It covers libel, slander, copyright infringement and more.

What Does Errors and Omissions Insurance Cover? 

Errors and omissions insurance, also known as E&O insurance or professional liability, covers claims concerning professional negligence relating to an offered service or specialty that causes clients to lose money. For example, an accountant makes a mistake that costs their client thousands of dollars. The client then sues for the money they lost. Errors and omissions insurance would cover the costs related to this lawsuit.

Do You Need Both of These Policies? 

Most businesses benefit from carrying both general liability and errors and omissions insurance. Both policies cover different dangers that can face a business. Accidents can happen anywhere across industries, and many businesses offer certain specialties or services that require errors and omissions insurance. 

Errors and omissions insurance is most used by medical professionals, accountants, fitness instructors, contractors, beauty technicians and other professions that promise specialized expertise on a certain product or service.

Carefully consider the unique risks of your business and the industry in order to decide what insurance is best and how much coverage is needed to keep the business and its assets safe from a lawsuit.

How Much is Liability Insurance for a Business? 

Liability insurance on its own is relatively inexpensive. General liability insurance costs an average of $53 a month while errors and omissions insurance costs an average of $46 a month. You can often combine these coverages into a business owners policy (BOP), which adds general liability, commercial property and other insurance coverages into a single comprehensive policy.