Errors & Omission Vs. General Liability Insurance

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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General Liability Insurance:

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.

Written By: PolicyBazaar - Updated: 29 July 2021
Policybazaar for Business - Comprehensive Liability Insurance - Customer Reviews
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4.3 April 09, 2023
Shubh
Competitive Premiums
The premiums offered by PolicyBazaar for the Comprehensive General Liability Insurance are competitive, considering the extensive coverage and top-notch customer service they provide.Truly recomend it.
Ludhiana
4.3 March 28, 2023
Prakhar
Worth Buying
PolicyBazaar worked closely with me to tailor the coverage to meet the specific needs of my business.Worth buying.
Dehradun
3.8 March 16, 2023
Veer
Wide Coverage
One of the most significant aspects of this insurance is its coverage. It provides extensive protection against a wide range of liabilities, including bodily injury, property damage, etc. Thanks for the policy PB
Lucknow
3.8 March 04, 2023
Akash
Peace Of Mind
I have been a satisfied customer of PolicyBazaar for several years now. It offers a comprehensive and reliable safety that has given me peace of mind and allowed me to focus on growing my business without constant worry about unforeseen events.Thankyou PB.
Bareilly
3.8 February 20, 2023
Ram
Claim Process Is Hassle Free
PolicyBazaar's claims process is efficient and hassle-free. In the unfortunate event of a claim, they handled everything swiftly and professionally, ensuring a smooth resolution without unnecessary delays. This reliability and promptness have further strengthened my trust in their services.Thankyou.
Delhi
4 February 20, 2023
Rohan
Great Customer Support
PolicyBazaar can help you get your Insurance as I am in the construction Industry and needed some guidance on risk concerns. I contacted PolicyBazaar Team, whO explaned to me the process to get the Insurance. Thank you PolicyBazaar.
Jamshedpur
3.8 February 16, 2023
Aditi
Damages Covered
I recently purchased CGL insurnace from PolicyBazaar. They helped me to cover my damages. Thankyou.
Jamshedpur
4 February 12, 2023
Neha
Helpful Team
We were looking to buy Comprehensive General Liability Insurance Plan that protects Third party property from any accidental damage at my workplace. So we landed on the PolicyBazaar website. It was well managed and described all the benfits in detaill... We contacted their Customer support and dcided to buy from them. Thanks, PolicyBazaar Team
Coimbatore
3.8 February 08, 2023
Veer
All In One Platform
It is an All in one platform which provided me unique perks, Low premium prices and a fast claim settlement process. Thankyou PB. Excellent platform.
Vadodara
4.3 February 04, 2023
Amar
Good Package
Got a really good coverage. Thanks, PolicyBazaar
Lucknow