Professional Liability vs. General Liability for Architects and Engineers

What does each policy cover?  How are the similar?  How are they different?

Professional Liability is for design errors or omissions.  It relates to ‘your work’ and the potential claims that are from your architecture or engineering design.  It covers your firm for claims associated with the design and expenses related with the claim (attorney’s, expert testimony, etc).

General Liability covers your firm for liability outside of your design and not related to employee injuries.  These types of claims are not as common as the Professional Liability claims for architects and engineers but do occur.

What are the similarities?

• Both policies protect your firm for liability issues associated with your business.  There is liability in everything that your business is involved with, each policies provides protections for some of those liabilities.
• Your firm may be required by contract to have both types of policies in place.  For design professionals it is quite common to have a requirement for both types of policies, additionally your client may require your firm to have workers compensation.
• The policy limits include defense costs.  These are the costs for attorney’s to defend the claim made against your firm.  The defense costs are typically within the limits of liability.

What is the difference?

• General Liability is typically an occurrence policy and Professional Liability is a claims-made policy.  An occurrence policy is the policy that is in place at the time of the ‘occurrence’ is the policy that will provide coverage.  Claims-made is policy is the policy in place at the time of the claim is the policy that will provide coverage.
• Your firm’s client can be additional insured on General Liability but not on Professional Liability.  The reason your client is not able to be additional insured on the Professional Liability policy is because they are not the ‘professional’.  However, the General Liability will provide the additional insured coverage.

Both Professional Liability and General Liability policies are valuable for businesses.  Please contact your Professional Underwriters agent to determine which coverage makes the most sense for your business.