When the pandemic hit, many people examined what they were doing in their careers and decided it was time for a change. Whether it was turning a side hustle into an all out business or focusing on something entirely new, many people decided to make the switch from working for a company to working for themselves. This is great and we know from personal experience that it takes a lot of work and dedication. An aspect that many people do not think about when striking out on their own is the importance of having the right insurance to protect their business. Read on to learn more about why professional and general liability insurance is important and how it can help protect you and your business.
Professional Liability and General Liability Insurance
Professional Liability Insurance, sometimes referred to as errors and omissions insurance (E&O insurance), is designed to protect personal services professionals from claims relating to their professional services. A personal service professional provides a service or professional advice rather than a manufactured product.
A customer could sue you because you did something you shouldn’t have, or you didn’t do something you should have, while providing your professional services. For example, an accountant, personal trainer, massage therapist, nutritionist, tutor, attorney, etc. could be sued for simply making a mistake that in some way harmed their client. Having professional liability insurance is a great asset for those in these or other personal services professions and may be required by law for some professions.
Breaking It Down
Professional Liability Insurance
Professional liability insurance is important because it helps to protect you should a claim be filed against you alleging professional negligence, making a mistake, or causing a personal injury. Libel and slander are forms of personal injury. Whether the claims are valid or not, if you are accused of having done something that injured another, you need insurance protection.
Consider the following:
- A massage therapist performs a deep tissue massage on a client who noted shoulder pain prior to the treatment. While performing a shoulder stretch during the session, the client winces and asks the therapist to stop. The massage therapist stops the treatment immediately. A few days later, the client sued the massage therapist for causing a torn ligament and the need for surgery.
In this case, Professional liability insurance could help protect the massage therapist by paying for defense costs and any subsequent settlement or judgment, to the limits of their policy.
- While having lunch at a restaurant with a friend, a nutritionist discusses a recent interaction he had with one of his clients. The client learns of the conversation and sues the nutritionist for slander and public ridicule.
Alleged libel and slander claims may arise from intentional disparaging of a person or business, an accidental slip-up made in conversational passing, or anything in between. Fortunately, professional liability insurance coverage can step in to protect you and your business against such claims.
General Liability Insurance
Personal Services Professionals may also need general liability insurance, also referred to as commercial general liability insurance (CGL). While personal liability insurance and general liability insurance may sound similar, general liability differs from professional liability in that it protects the business from claims of bodily injury or property damage arising out of alleged negligence. For example:
- A massage therapy client slips and falls while entering the therapist’s place of business. The client alleges his knee was injured in the fall and he seeks medical attention and incurs medical bills. He later sues the therapist for negligently maintaining the floor and causing his fall. General liability insurance would protect the therapist from this type of claim. It would pay for defense costs and, if the therapist is found negligent, the client’s bodily injury to the extent of liability of the policy limits.
- A personal trainer is visiting a client’s home and accidentally knocks over a computer monitor, breaking it. The personal trainer apologizes and helps to clean up the mess. The monitor was very expensive, and the client wants the personal trainer to pay for a new one. Fortunately, the trainer has a CGL policy that protects her and pays for the client’s computer monitor.
You wouldn’t jump out of an airplane without a parachute. Mistakes and accidents happened. Why would you consider starting a business without insurance protection?
Please note, the information provided here is a brief overview and not meant to be an exhaustive discussion of insurance coverage for professional service providers. To learn more, and get an accurate quote for your business, reach out to us today!









