Distinguish between General Liability Insurance and Professional Liability Insurance.

General Liability Insurance covers business from a few "general" lawsuits that any business could face. It triggers when a third party (i.e., anyone who doesn't work for the company) sues the business over: Bodily injuries they incurred on the commercial premises, Damage caused to their property, Advertising injuries (e.g. slander, libel, misappropriation, and copyright infringement). General Liability Insurance pays for the legal expenses (lawyers' fees, court costs, and settlements or judgments). Any small-business owner, no matter their industry or the size of their business, can face these claims. That's why many consider this policy to be the keystone of a business protection plan. Professional Liability Insurance is also known as "Errors and Omissions Insurance" or "Malpractice Insurance". Its coverage focuses specifically on the lawsuits that stem from the professional services rendered. Though this policy is especially important for service providers to carry, most small-business owners can benefit from its coverage. It shields the insured from third-party lawsuits alleging: Negligent professional services. Failure to uphold contractual promises. Incomplete or shoddy work. Mistakes or omissions. These torts are among the most expensive a business owner can face. One need not be at fault to be sued, an unhappy client may name the business in a lawsuit to recoup the "losses" they incurred because of the work carried out.