deepthi sEver wondered if a simple mistake in your professional work that costs a client a fortune would be covered by Commercial General Liability (CGL) insurance?
If you’re a freelancer or operate your business remotely, with less risk of customers physically visiting your office but higher chances of financial errors. Would Professional Liability (PLI) insurance step in then?
If questions like these sound familiar, you’re in the right place.
The importance of both CGL and PLI insurance is being recognised worldwide. More businesses and professionals are actively seeking these protections, yet confusion between the two types of insurance remains common. Which one do you actually need? When does one cover a claim that the other doesn’t?
In this blog, we’ll break down the key differences between General Liability and Professional Liability insurance, helping you understand which coverage fits your business.
Mitigata: Trusted Partner for General & Professional Liability Insurance
At Mitigata, we help businesses protect themselves against unforeseen risks with confidence. As India’s top full-stack cyber resilience company, we’ve served over 800 enterprises, getting a thorough understanding of the difficulties they confront today.
We work with leading insurance companies such as HDFC ERGO, Bajaj Allianz, ICICI Lombard, and others to give the most comprehensive general and professional liability insurance coverage.
Our clients trust us, and our 100% retention rate reflects that trust. Here’s why:
- Comprehensive Coverage that addresses all critical risks
- Competitive Pricing that delivers value without compromise
- Instant Support whenever you need assistance
- Fast and Simple Claim Process to avoid any last-minute hassle
Why Pay More When ₹3CR Cover Costs Just ₹15,000/Year?
What is Commercial General Liability Insurance?
Commercial General Liability insurance is your business’s first line of defence against everyday accidents and mishaps that can happen in the physical world. Someone slips over a cable in your office, your product malfunctions and ruins a customer’s home, or your billboard mistakenly includes a competitor’s trademark phrase.
These are real-world situations that might result in expensive litigation, and CGL insurance is meant to cover them.
Coverage includes:
Bodily Injury and Property Damage: CGL covers bodily injury and property damage caused by your commercial operations.
Personal and Advertising Injury: This coverage protects against claims of libel, slander, and misleading advertising.
Medical Payments: If someone is injured while on your property, CGL will reimburse the medical expenses.
Legal defence costs: This includes your lawyer’s fees, settlements, court costs, and any other litigation costs associated with covered claims.
Products and Completed Operations: This coverage protects you against damages from products that you sold or services you completed.
Design Defects: This coverage protects you against losses from products that are unreasonably unsafe because of their defective design.
Failure to Warn: This covers claims for failing to provide adequate instructions for using the product or warnings for product safety.
When Accidents Happen, We’re Already There.
What is Professional Liability Insurance?
Professional Liability Insurance, Errors and Omissions (E&O) Insurance, and Professional Indemnity Insurance are three different labels for the same type of insurance coverage. This coverage is for service-based businesses, service providers, and professionals who face claims due to errors, omissions, negligence or mistakes on the job.
If you provide consulting services, software development services, design services, and/or financial advice, one mistake can create an expensive lawsuit. This insurance is designed to protect your business if there is a claim and to prevent financial impact.
Looking for the right PI insurance provider? Discover India’s top 10 picks trusted by professionals.
Coverage includes:
Negligence Claims: It covers if a client claims the service was inadequate or did not satisfy the professional standard of care.
Errors and omissions: If you or your company committed a mistake or failed to provide a service that resulted in a genuine economic loss for the customer.
Legal defence costs: It includes the cost of your lawyer, court fees, and settlements.
Misrepresentation Claims: When a claim is brought against you or your company for allegedly providing inaccurate or misleading information.
Breach of Contract: When a client claims you failed to deliver a result, resulting in a disagreement or litigation.
GCR of Professional Indemnity at ₹75,000/Year
Key Differences: General Liability vs. Professional Liability
| Aspect | Commercial General Liability (CGL) | Professional Liability (E&O / Indemnity) |
| Type of Risk Covered | Physical injuries, property damage, or advertising-related harm | Financial losses from errors, negligence, or bad advice |
| Best Suited For | Product manufacturers, retailers, construction, and physical businesses | Consultants, IT firms, healthcare providers, legal and financial advisors |
| Trigger for Claims | Accidents or physical damage caused by business operations | Professional mistakes, omissions, or misjudgments causing financial loss |
| Example of Coverage | Customer slips in a store and gets injured | Client sues an accountant for incorrect financial reporting |
| Legal Defence Coverage | Covers defence against bodily injury or property damage claims | Covers defence against negligence or service-related lawsuits |
| Policy Focus | Tangible losses and third-party injuries | Intangible losses due to professional errors |
| Regulatory Requirement | Often required for businesses with public interaction | Commonly required for professionals offering specialised advice |
| Typical Cost Range | Starts at ₹15,000/Year* for small businesses | Starts at ₹75,000/Year* depending on profession and revenue |
Which Policy Is Right for Your Business?
Here’s the reality: many businesses actually need both, but let’s break down who needs what.
You definitely need General Liability if you:
- Run a restaurant where customers dine in
- Manufacture or sell physical products
- Have a physical office or storefront where people visit
- Provide services that involve going to client locations (plumbers, electricians, cleaning services)
Before you buy Commercial General Liability Insurance, read this.
Here are the 10 best insurers in India.
Professional Liability is essential if you:
- Offer consulting in any field (marketing, HR, business strategy)
- Develop software, apps, or provide IT services
- Give professional advice that clients pay for and act upon
- Provide creative services like design, content, or advertising where deliverables impact client revenue
Think about a digital marketing agency. They need General Liability because clients visit their office (slip-and-fall risk), and they might accidentally infringe on clients’ copyrights in their campaigns.
But they also desperately need Professional Liability because if their SEO strategy tanks a client’s website traffic or their ad campaign fails to deliver promised results, the client will sue for financial damages. That’s two completely different types of risk requiring two different policies.
One Mistake Shouldn’t Cost You Your Reputation
Conclusion
General Liability protects against physical world problems, while Professional Liability protects against the financial fallout from your professional work.
Mitigata helps businesses identify and implement the right coverage for their unique risk landscape.
Get in touch with Mitigata today to secure comprehensive protection for your business.
akshit k