Professional Liability
Professional Liability (E&O) vs. General Liability: Which Do You Actually Need?
By the PolicyZen Team · Updated March 2026 · 8 min read
A consultant gives bad advice that costs a client $500,000. A customer trips on a loose carpet at the consultant's office and breaks an arm. These are two completely different liability exposures — and they're covered by two completely different policies.
General Liability covers bodily injury, property damage, and certain personal injury (libel, slander) claims arising from your business operations. Professional Liability / Errors & Omissions (E&O) covers claims arising from mistakes, errors, omissions, or failure to perform in your professional services — the financial harm you cause through your work, not physical injury.
General Liability
- Customer slips and falls at your location
- You damage a client's property while working
- Advertising injury (copyright, defamation)
- Product defect causes physical injury
- Third-party bodily injury from your operations
- Occurrence-based: covers events during policy year
Professional Liability / E&O
- Your advice causes a client financial loss
- You miss a deadline causing client damages
- Software you wrote has a bug that costs the client
- Misrepresentation in professional services
- Failure to deliver contracted services properly
- Claims-made: covers claims filed during policy year
Who Needs Each
General Liability is appropriate for nearly all businesses — anyone with a physical location, anyone who works at client locations, anyone whose employees could cause physical damage. It's the baseline of business insurance.
Professional Liability / E&O is essential for: consultants, accountants, attorneys, financial advisors, architects, engineers, IT professionals, real estate agents, insurance agents, healthcare providers (though healthcare typically uses "malpractice" terminology), designers, and anyone providing advice or specialized services for which clients rely on their expertise.
The Critical Gap: GL Does Not Cover Professional Errors
A financial advisor who gives bad advice that loses a client $200,000 is not covered by general liability — because there's no bodily injury or property damage. E&O covers the financial loss claim. Conversely, if that advisor's office water pipe bursts and damages the client's laptop — that's a GL claim, not E&O.
What's the difference between E&O and malpractice insurance?
They're the same concept applied to different professions. "Malpractice" is the term used for licensed healthcare providers (physicians, dentists, nurses) and attorneys. "E&O" or "professional liability" is the term used for most other professional service providers. The coverage mechanics are the same: claims-made policy covering negligence, errors, or omissions in professional services.
Do I need both policies?
Most professional service businesses need both. GL covers the physical world (injury, property damage). E&O covers the professional world (bad advice, service failures). Buying only one leaves significant gaps. A BOP (Business Owners Policy) typically includes GL but not E&O — E&O must be purchased separately for professional service firms.
PolicyZen