General Liability vs. E&O Insurance

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What is General Liability?

As a small business owner, your focus is on building profits, having happy customers, and making sure you keep your employees happy. The last thing you want to worry about is someone bringing a liability claim against your business because you forgot to put a wet floor sign out, or you had a rug with a bump in, and someone slipped and broke their wrist. This is where General Liability insurance can save your business. It provides protection from financial losses to your business as a result of bodily injury and property damage. It also covers expenses related to these lawsuits, including attorney's fees and court costs.

Regardless of your guilt, these lawsuits can cost tens of thousands of dollars or more. Without having this generalized liability coverage, you will undoubtedly eat into your profits that you worked so hard to earn. General Liability also covers advertising injuries that include libel and slander at a minimum. Unfortunately, with today's digital world, these claims are becoming more common as it is much easier to offend someone online than it used to be.

What is Errors and Omissions Insurance?

Do you provide any professional services? Perhaps consultation services, design services, or give any opinions such as legal advice or therapy? All of these services come with great rewards but even higher risk. Especially when it comes to giving your educated opinion, there is much room for error. Regardless of how careful you are, you are still human and are prone to make mistakes. If you offer advice that turns out to be detrimental to a client, or they take it the wrong way, it can ultimately fall back on you. Also, if you are providing design services and the design turns out to be faulty or cause unforeseen financial damages suffered by the client, you will likely be sued for lost profits and losses to rebuild it properly. All of these situations will be covered by Errors and Omissions insurance.

  • Negligence - if you neglect to provide the professional services you agreed to, or make a mistake whether intentional or not, you will be sued.
  • Breach/Failure - you probably sign contracts every day that are very specific. Be sure to follow them or the client will come after you for breach or failure to meet your contractual obligation.
  • Defense Costs - some E&O claims can break the bank. Without Errors and Omissions insurance you will likely have to close your business and file bankruptcy.

How Much does General Liability and E&O Insurance Cost?

Each insurance company will have its own rates, but you can plan on paying the following, at a minimum, annually. Keep in mind that there are many factors to take into account, and they will be different for each policy. The most impactful will be past claims history.

  1. General Liability - this can start as low as $250, but it will be based on your operations.
  2. E&O - this policy can vary widely, but plan on a minimum of $1,000 to be safe when budgeting.

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What Are the Similarities Between the Two?

  1. Liability - both policies protect liabilities involved with your business. Unfortunately, slips and falls and errors on your part can be unavoidable, no matter how much you plan.
  2. May be required - if you are doing work for other businesses, you will likely be required to carry one, or both, of these types of policies.

Business Insurance

Running a business is challenging enough without having to worry about lawsuits, employee injuries or property damage. Having the right insurance gives you the peace of mind to focus on what matters - running your business.

The coverage you need depends on the type of business you run. A restaurant owner needs to be covered against customers possibly getting food poisoning while an accountant needs to be covered against calculation errors. CoverWallet's intelligent assessment system will identify the insurance you need based on your specific business, get you a policy that fits your budget, and do it all in less time than you think.

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