This is one of the most common insurance questions asked by architects and engineers:

What is the difference between Professional Liability and General Liability coverage?

Both coverages are integral to the protection of your firm, so it’s no coincidence that you’ll see requirements for both coverages in almost ALL contracts. But what are the differences between them?

Professional Liability (PL) vs. General Liability (GL)

GL coverage is triggered by bodily injury or property damage.
PL coverage is triggered by bodily injury, property damage, or economic (consequential) damages.

GL is typically written on an “occurrence” basis.
PL is written on a “claims made” basis.

GL covers damages arising out of an a/e firm’s day-to-day operations, excluding professional services.
PL covers damages arising out of an a/e firm’s professional services.

GL limits are not eroded by defense costs. Defense costs are unlimited and sit outside the limits of liability.
PL limits are, typically, eroded by defense costs. In other words, the liability limit covers both defense and indemnity payments.

GL allows Additional Insureds.
PL does not allow Additional Insureds.

GL may be scheduled under an Umbrella (Excess) Liability Policy.
PL cannot be scheduled under an Umbrella (Excess) Liability Policy.

(Professional Liability insurance is also known as Errors & Omissions  insurance.)

The answer to this Frequently Asked Question was supplied by a/e ProNet member IOA Insurance Services of California. Visit their website for more information.