And does your tribal entity need either – or both?
Because we regularly encounter a bit of confusion from insureds, prospective clients, and sometimes even agents with regards to the difference between professional liability and general liability, we’re hoping to clear the air here, making the distinction between these two policies a little plainer.
Arrowhead Tribal offers both types of coverage, along with more specialized coverage such as police and health care professional liability, tribal officials E&O, employment practices liability, fiduciary liability, liquor liability and more. All tribal businesses that we cover start with the standard general liability coverage, and then add on more comprehensive levels of coverage, depending on their business risks. But today we’ll focus just on the main distinctions between professional and general liability.
General liability for tribal businesses
A general liability (GL) insurance policy is your foundational coverage, protecting your entity mainly from third-part lawsuits over bodily injury and property damage. When a customer or a vendor is injured on your site, they’re covered under the bodily injury portion of the policy. When one of your employees accidentally drops a customer’s luggage, breaking their laptop or tablet, you’re covered.
GL also pays attorney fees, court costs, witness fees, settlements, and court-ordered judgments. It can cover, for instance, an injured client’s immediate medical expenses and the cost of repairing or replacing their damaged property.
Even in the most risk-free work environments, there’s always a possibility of an unpreventable accident. Sooner or later, Murphy’s Law seems to win. That’s why GL insurance is so crucial.
Its coverage is broad, protecting your company from claims from a wide spectrum of sources, and can include contractual liability, accidents from products you manufacture, and even libel claims. It safeguards against some of the most common and unexpected risks small-business owners face, eliminating the need to find and manage multiple coverages and monthly payments.
Professional liability for tribal businesses
The next building block in your protection that you’ll want to consider, depending on your business risks, is a professional liability policy, often referred to as Errors and Omissions (E&O) insurance. Its protection from third party lawsuits goes even further: it’s the only policy that covers claims involving negligence, misrepresentation, inaccurate advice, or other violations of good faith and fair dealing. It protects you when
- You’re held responsible for a service that was provided, or failed to be provided, or did not have the expected or intended results
- A customer or business partner claims they lost money due to your business’s negligence
However, professional liability coverage doesn’t address liability for physical injuries or property damage – that’s the job of GL.
Some instances when professional liability or E&O would be needed is if a dissatisfied customer alleges they experienced financial loss because you delivered inferior or incomplete products, failed to deliver on a promised service or were neglectful or careless when providing professional services. If you’re sued for negligence, your costs associated with the claim and lawsuit – even if it’s meritless – are still covered. These can include attorney fees, court costs, settlements or judgments.
Professional liability coverage isn’t totally comprehensive, though. There are two major types of claims that these policies don’t address: 1) Anything involving criminal prosecution. 2) Cyber liability resulting from technology issues or data breaches. For this coverage, you need to add cyber liability insurance as a third building block.
If you’re uncertain as to the right coverage you or your client needs to protect their business risks, give Brett Barnsley a call at 509.591.5109 to discuss your options.
Resources:
10 Most Common and Costliest Small Business Claims
General Business Liability Insurance – How it Works and What Coverage is Right for You
Tribal Errors and Omissions Liability