What's the Difference Between Professional and General Liability Insurance?

Written by Amber Harper—Commercial Insurance Advisor

October 6, 2022 · 4 minute read ·

Blog What's the Difference Between Professional and General Liability Insurance?

If you run a drug or alcohol treatment center, you may find it challenging to understand the different liability insurance options. However, understanding your facility's risks is the key to deciding which types of coverage you need.

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Generally, most businesses should have at least professional or general liability insurance. However, some companies, such as treatment centers, should have both. Both professional and general liability insurance protects against third-party lawsuits, negligence, and malpractice claims.

What is the difference between professional and general liability? Why are both necessary for your treatment center?

The Biggest Difference Between Professional and General Liability Insurance

First, you must note that the definitions we provide for each insurance are directly related to how insurance professionals use them for medical practices and drug and alcohol treatment centers and not how they relate to other industries.

The main difference between general liability and professional liability is in the types of risks they each cover. General liability covers physical risks, such as bodily injuries and property damage. Professional liability covers more abstract risks, such as errors and omissions in the services your business provides.

Professional Liability Insurance

Professional liability insurance is also known in the insurance world as "errors and omissions" or malpractice insurance. This insurance protects against injuries caused by a treatment facility or patient care mistake.

For example, a patient or their family may file a claim because of damage caused by medical negligence or malpractice. In this case, professional liability insurance may help protect your facility and the affected employee from high financial costs.

Your employees are good at their jobs. However, you need to protect them if an accident happens or a patient believes an employee or treatment team member made a mistake, whether or not they made one. Most states require medical professionals, including social workers, therapists, doctors, and counselors, to have professional liability insurance for this reason.

Professional Liability Insurance Options

Your treatment center has unique needs. Luckily, you can choose from a variety of professional liability policy options. The two most common types are occurrence and claims made.

  1. Occurrence policies cover any claims made during your insurance coverage period. As long as the third party files the claim during your policy coverage, it doesn't matter when the treatment occurred.
  2. Claims-made policies are different. Both the treatment and claim must occur during the coverage period.

When choosing the option that is right for you, working with an experienced broker can make the process easier. Leavitt Coastal Valley has over 70 years of experience working in the insurance industry. Our expertise and knowledge of the treatment industry allow us to understand your needs and work with you to find an affordable professional liability policy that meets your needs.

General Liability Insurance

General liability insurance covers injury claims filed by those who got hurt on your property or by the indirect actions of your staff. Like professional liability, general liability insurance may reduce the financial impact of filed claims.

Unfortunately, insurance claims are common, especially in the medical, mental health, and drug and alcohol treatment fields. A general liability policy may pay up to your policy limits to cover the costs of the following if a physical injury occurs due to an accident on your facility's property:

  • Defending or settling claims in or out of court
  • Any additional judgments awarded to the injured party by the court
  • Any investigation costs from the insurance company
  • Any attorney expenses
  • Medical expenses for the wounded third-party

As with professional liability insurance, most states require every business to have general liability insurance, no matter the industry. However, general liability insurance does not cover every accident that occurs on your property. You may need additional insurance to cover automobile accidents, workers compensation claims, and malpractice. You can talk to your insurance broker to learn about these supplemental insurance options.

General Liability Insurance Options

General liability policies are more flexible than professional liability policies. Depending on your needs, you can purchase a stand-alone policy or buy a commercial insurance package. If you have a high number of risks or large areas of vulnerability, you may also need to purchase a supplemental umbrella policy to provide extra protection.

Like professional liability policies, there are two major forms of general liability: occurrence and claims-made. However, these forms have distinct uses:

  1. Occurrence liability covers the cost of any injury that happens during the policy's period, even if the injured party filed the claim after the policy expired.
  2. Claims-made coverage protects against claims filed during the policy period, even if the injury occurred before the policy went into effect.

At Leavitt Coastal Valley, we can help you choose the right insurance plan for your facility and its needs.

Any lawsuit or claim may negatively impact your treatment center and employees, so it is essential to be prepared and protected before an accident occurs and someone files a claim. Professional and general liability insurance can provide coverage if a claim arises and protect your facility from significant financial loss. While both are necessary for your treatment center, it is important to understand the difference. If you're finding it difficult to understand the difference or need help finding the right coverage plan for your facility, Leavitt Coastal Valley can help. We understand insurance and we understand your industry. We'll work with you to find a coverage plan that leaves you protected, reduces your risk of financial loss, and allows you to provide the best treatment possible for your patients.

Call our team of professionals at (805) 925-8607 to learn more about commercial insurance.

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