Errors & Omission insurance and general liability insurance both protect the business against most of the common liabilities, however, they cover lawsuits of different types. Here is a quick overview of these two types of insurance plans:
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The general liability insurance works as a foundation of the protection plan of business. Under this type of insurance policy, a range of liability covers that most of the businesses require for their expansion despite their size. A general liability insurance plan provides insurance coverage for lawsuits that are for:
Bodily injury to non-employees incurred at its commercial property.
Damage that is caused to the property of some other person while the work of the insured is being carried out there.
Advertising injuries like infringement of copyright, libel, slander, misappropriation, etc.
General Liability Insurance - What Does It Pay For?
When a person or organization that is outside the insured company files a lawsuit against it, a general liability insurance policy provides coverage for the legal expenses. This may include the fees of the advocate, costs of court, and settlement. In this way, general liability insurance can save its policyholder from paying hundreds of thousands of rupees from his/her pocket.
What Does Error and Omission Insurance Mean?
An error and omission insurance policy is also known as malpractice insurance or professional liability insurance as per the industry. This policy provides a narrower focus than a general liability insurance policy. Even though the insurance policy as well covers the lawsuits of third-party, it only provides protecting shield to the business from various lawsuits of professional mistakes.
All the professional services providers must have a errors and omission insurance policy that includes real estate agents, tax papers, and experts of the technology. An insurance policy can help in paying for the lawsuits incurring due to:
Negligence in professional services
Failing to uphold a specific standard of care
Failing to meet the obligations of a contract
Oversights or errors
Errors and Omission Insurance - What Does It Pay For?
A business owner may have to pay a hefty amount as legal fees even if his/her business is accused falsely. For example, a dissatisfied client of a business can be unhappy with the results of its work and may decide to sue the business for making up his/her expenses.
In such cases, errors and omissions insurance policy can help to make sure that the business does not need to pay for all the legal expenses whether they are actual or alleged made by a company. This can include fees of advocate, settlements, and cost of court.
How Are Error and Omissions and General Liability Insurance Different?
Here is the fundamental difference in both these types of insurance plans:
They provide coverage for different exposures of risk:One cannot rely on an Error and Omission policy for protecting the business when a client sues the business for medical expenses or falls on the property of the company. For all these expenses one has to have a general liability insurance policy. On the other hand, a business cannot depend completely on general liability insurance when it is issued to file to uphold professional standards to care - it is the territory of error and omission insurance.
Different Scopes of Protection are Offered:As per its name, general liability insurance provides generalized insurance coverage for lawsuits, advertising injuries, and property damages. Errors and Omission insurance covers only financial losses incurred to someone due to the insured business.
Does One Need Both These Insurance Types?
As mentioned earlier, both these insurance types cover liabilities that any owner of a small business might come across. Therefore, one should consider having both these policies when his/her business offers professional services and at least one of the below-mentioned points are true:
One visits or handles client’s property
One advertises his/her business or uses social media
One sells or makes products
People who are other than employees (delivery people, clients, etc.) visit the business
Summing It Up!
By far the meaning, definition, and the differences between general liability and errors and omissions insurance policies must be clear to all. However, there are some similarities as well, which are both make claim-based coverage, cover some uncertain liabilities, etc. So before buying any of these one must understand his/her requirements first.
Disclaimer: Above mentioned insurers are arranged in alphabetical order. Policybazaar.com does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.
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06 Jan 2026 by Policybazaar104 Views
Disclaimers+
+Disclaimer: Rs 4720/year is the starting premium for a 1 Cr sum insured for commercial general liability insurance for the industry operation - Air condition Installization work, with Territory as Worldwide, including USA & Canada. By clicking on "View Plans" you agree to our Privacy Policy and Terms Of Use and also provide us a formal mandate to represent you to the insurer and communicate to you the grant of a cover. The details of insurance coverage, inclusions and exclusions are subject to change as per solutions offered by insurance providers. The content has been curated based on the general practices in the industry. Policybazaar is not responsible for the factual correctness of these details.
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