General Liability vs. E&O Insurance (2026 Guide)

Updated: January 27, 2026

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What’s the Difference Between General Liability and Errors & Omissions Insurance?

These policies separate risk based on how harm occurs. General liability insurance handles accidents and physical damage, while the professional liability other covers mistakes in professional services that lead to financial loss.

Below you can see how these policies differ side by side and how they function for separate risks.


Core purpose	Covers third-party bodily injury & property damage	Covers financial loss from professional mistakes
Type of harm covered	Physical injury or damage	Economic or financial harm
Triggered by	Accidents, physical incidents	Errors, negligence, missed steps, bad advice
Covers slip-and-fall claims?	Yes	No
Covers faulty advice or services?	No	Yes
Covers missed deadlines?	No	Yes
Covers advertising injury?	Yes	Sometimes (varies by policy)
Typical users	Most businesses	Service-based and professional firms
Legal focus	Premises and operations liability	Professional negligence liability

When General Liability and Errors and Omissions Policies Are The Same vs. When They’re Different

These policies are often grouped together because both respond to lawsuits, but they apply to different legal theories of liability.

They overlap in that they both:

Cover legal defense costs
Protect against negligence-related lawsuits
Respond to claims from third parties

Both policies are fundamentally different because:

General liability excludes claims based on professional services or advice
E&O excludes bodily injury and property damage claims
GL responds to accidents; E&O responds to performance failures
One does not activate if the other is triggered

In Short: If a claim is based on “you did something wrong physically,” it’s GL. If it’s “your service or advice caused loss,” it’s E&O.

What Do General Liability and Errors and Omissions Insurance Cover?

The clearest way to see the distinction between general liability and E&O insurance is by examining the types of claims that typically fall under each policy. We've broken down these items below for your comparison.

When the Differences Between General Liability and Errors and Omissions Policies Actually Affect Your Business

The distinction between general liability and errors & omissions becomes important when the type of harm your busines_s_ can cause is not physical, but financial. The scenarios below show where that difference changes your real-world risk.

Why it matters:
General liability only responds to physical injury or property damage. If your work causes financial loss without physical harm, a GL policy typically will not apply.

Example:

A marketing consultant launches an ad campaign with incorrect pricing information, causing a client to lose revenue. No one is injured and nothing is damaged, but the client sues for lost income.

This is an E&O claim, not a general liability claim.

Industries where this is common:
Consultants, marketing agencies, accountants, IT service providers, designers, architects, engineers.
Why it matters:
The more your business is paid for expertise rather than physical work, the more your risk shifts from accidents to performance-related claims.

Example:
An IT provider misconfigures a system, causing downtime for a client. The client claims financial losses from disrupted operations.
This falls under E&O because it involves service performance, not physical damage.

Industries where this is common:
Technology services, financial advisors, legal professionals, healthcare providers, engineers.
Why it matters:
Mistakes in plans, specifications, code, or data often cause economic loss, not physical damage, which GL does not cover.

Example:
An architect’s design error leads to costly reconstruction. The building isn’t damaged by an accident, the issue is faulty design.
This is an E&O exposure.

Industries where this is common:
Architects, engineers, software developers, surveyors, design firms.
Why it matters:
Many service contracts specify E&O coverage because clients know financial harm is the primary risk — not slip-and-fall injuries.

Example:
A consulting firm signs a contract requiring professional liability insurance. The requirement exists because the client’s risk is poor advice, not physical accidents.

Industries where this is common:
Consulting, IT, professional services, finance, creative agencies.
Why it matters:
If your exposure comes from accidents, property damage, or bodily injury, general liability is the primary protection.

Example:
A contractor drops equipment that damages a client’s property.

This is a general liability claim, not E&O.

Industries where this is common:
Construction, retail, restaurants, manufacturers, event venues.
Why it matters:
Many businesses have physical and professional exposure, meaning one policy cannot replace the other.

Example:
A design-build contractor could face a GL claim if a visitor is injured on-site and an E&O claim if design flaws cause financial loss

Industries where this is common:
Engineering firms, design-build contractors, tech installers, specialized service providers.

Errors and Omissions Insurance vs. General Liability: Bottom Line

This comparison is about how harm occurs, not which policy is broader. General liability addresses accidents and physical damage tied to operations, while E&O addresses failures in professional work, judgment, or service delivery. Many service businesses face both types of exposure, which is why the policies often need to work alongside each other rather than as alternatives.

Errors and Omissions Insurance vs. General Liability: Next Steps

Now that the difference is clear, the goal is to match your business’s real sources of risk to the right type of protection.

Your next move depends on where you are in the process:

If you’re figuring out what coverage your business needs

Start by identifying how your work could realistically cause harm:

Could someone be physically injured because of your operations?
Could a client lose money because of your advice, services, or deliverables?

If the first answer is yes, general liability is relevant. If the second is yes, E&O becomes important.

If clients rely on your expertise or deliverables

Your risk shifts from accidents to outcomes. The more your work influences client decisions, systems, finances, or results, the more E&O becomes a core protection and needs higher limits.

If your business is growing or changing

New services, consulting roles, or expanded responsibility can introduce E&O exposure even if your business previously only needed general liability. Reassess coverage when your role shifts from physical operations toward expertise-based services.

If you’re unsure how your risk translates to insurance

Think through realistic scenarios based on actual coverage items:

A customer trips in your office → general liability
A client claims your mistake cost them revenue → E&O

Mapping situations to coverage types clarifies what belongs where.

If you’re early in the buying process

Start with the policy tied to how your business primarily creates value:

If your risk comes from physical operations → start with general liability
If your risk comes from knowledge, advice, or service delivery → start with E&O

About Angelique Palenzuela-Cruz

Angelique Palenzuela-Cruz is a Content Writer at MoneyGeek specializing in business insurance, with a primary focus on three core coverage types: general liability, workers’ compensation and professional liability insurance. She creates in-depth content that helps small business owners understand policy terms, coverage options and state-by-state considerations so they can make informed insurance decisions.

With five years of experience in personal finance journalism, Angelique has covered a wide range of insurance and lending topics, including mortgages, HELOCs, home equity loans, and personal insurance products such as auto, homeowners, health and pet insurance. Her research-driven approach is informed by her Bachelor of Arts in Psychology, which shapes how she presents complex financial information in clear, accessible language for everyday readers making coverage decisions.

At MoneyGeek, she is committed to ensuring her content meets rigorous accuracy and quality standards, with every article developed under editorial review to help business owners better understand their coverage options.

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General Liability vs. E&O Insurance