Q: Do I need General Liability AND Professional Liability Insurance?
A: Yes. General Liability and Professional Liability Insurance each cover different types of lawsuits. And you'll need both policies if you want strong liability protection for your accounting firm or financial services business. Here's how these insurance policies differ:
- General Liability Insurance pays for lawsuits when a third party (non-employee) sues your firm over bodily injury, property damage, or reputational injury. This includes coverage for lawsuits over injuries and property damage that occur when you meet with clients. Say a client drops off a box of tax documents and slips while walking up your steps, breaking her hip in the fall. GL Insurance can pay for your lawsuit costs, including lawyers' fees, court expenses, and damages.
- Professional Liability Insurance covers lawsuits over your work or professional services. When clients sue you over mistakes, missed filings, inaccuracies, or bad investment advice, PL Insurance (also called Errors & Omissions Insurance) covers your legal costs.
Because every accounting firm, RIA, or tax preparer has both general liability (injuries and accidents) and professional liability (mistakes and errors in your work), you'll need to have both insurance policies to cover your lawsuit risk exposure.